Custom Image

CFO Survey Results: Priorities and Action Plans 2022


  • A large majority of finance executives are optimistic about revenue growth in 2022, compared to 2021
  • The role of CFO has expanded with new responsibilities involving modernization initiatives and talent management added to the profile
  • 86% of finance leaders believe investing in accounts receivable automation provides competitive advantage

Contents

Chapter 01

CFOs’ Priorities and Focus Areas

Chapter 02

Market Outlook

Chapter 03

Accounts Receivable: Challenges and Future Plans

Chapter 04

CFOs’ Outlook on Technology

Chapter 05

Appendix
Chapter 01

CFOs’ Priorities and Focus Areas


Cost optimization remains the top priority for CFOs despite all the other hats  they don as modern CFO. 56.4% of finance leaders mention that cost  optimization is a top priority for their business. Across the survey, on various  questions such as parameters for choosing software and reasons for  automating, lower costs figure as a prominent reason for the various decisions  that CFOs take

Next to cost optimization, data-driven decision making and reducing risk are  the other top priorities for finance leaders. The growing volumes of data and the  importance of using it for predicting future events make analytics a growing  field of interest for CFOs. Predictive analytics, machine learning, and artificial  intelligence are increasingly used by finance teams for risk management, fraud  detection, budgeting, and reporting.  

Managing risks becomes essential to mitigate revenue and asset loss. Due to the  increased emphasis on financial risk management and prevention of  cyberattacks and data breaches, finance executives need to keep a tight tab  on operations, data management and handling, and predicting, identifying, and  thwarting risks.

Top Priorities for CFO in 2022

We also asked CFOs whether their focus on areas such as financial accounting,  expenditure planning, and talent acquisition have decreased or increased in  2021 and 2022. Despite CFOs donning new hats, a majority of the finance leaders  mention that their focus on core areas such as financial accounting (59%), cash  and revenue forecasting (42%), budgeting (46%), compliance management  (43%), and financing activities (45%) will increase in 2022.  

27% of the CFOs felt that their focus on financial analysis will diminish in 2022  while 23% feel that their focus on strategic planning will be lower. CFOs’ focus on  M&A activities in 2022 is also slightly higher than in 2021 (33% vs 30%), indicating  a renewal in economic and market prospects.

Key focus area of CFO in 2022
Chapter 02

Market Outlook


CFO Survey Stats

Among businesses with more than 100 million in revenue, the optimism is higher,  with 92% of finance leaders expecting revenue growth of over 10%; 81% expect it  to grow by over 20%

According to mid-market finance leaders, the biggest risk to achieving their  2022 goals remain COVID shutdowns. The COVID lockdowns in 2020 and 2021  had resulted in the closure of several businesses, a stall in cash inflows, and a  freeze in hiring activities. Though governments and businesses are taking all  measures to prevent another economic meltdown, the threat of COVID  shutdowns remains. The unpredictability of the pandemic and the prolonged  remote work environment is what probably makes it a high-risk concern.

Biggest Risk in achieving goals in 2022

Outdated technology stack is the biggest factor that is negatively impacting the  efficiency of business operations, according to 41% of the respondents. Other  factors affecting the efficiency of business operations include remote workforce  (41%), length of time to onboard customers (37%), and verification of customer  credit facilities (36%)

Other Challenges: Remote work and talent crunch

As employees worked remotely due to the pandemic, maintaining data  security (39%) and monitoring productivity (32%) were the biggest challenges  for CFOs. Information gaps, access to data, and communication were the other  key challenges that businesses faced due to the remote work environment. 

While 41% of finance leaders expect their team to work completely on-site in  2022, 53% will adopt a hybrid model (39%) or a fully remote mode of working  (14%). This concession of allowing some flexibility in the mode of work could be  to attract and retain talent, which is another key challenge that business leaders face. 

Attracting and retaining talent is the third biggest risk that businesses feel can  affect their 2022 goals. Sourcing talent is a top priority for more than a third  (36%) of the finance leaders. Their focus on talent acquisition has increased in  2021 and 2022, according to 43% of the CFOs. Hiring more staff to close the skills  gaps within AR/AP teams is on top of the minds of 70% of the CFOs.

Chapter 03

Accounts Receivable: Challenges and Future Plans


Scaling for Growth of CFO

With revenue growth expected to be over 10% for most businesses, CFOs need  to prepare for processing and managing a higher number of invoices as well  as customers.  

Cash reconciliation errors (36%), credit management (34%), and lack of skilled  resources (35%) are the top challenges that finance leaders face in managing  accounts receivables, in addition to scaling for growth (44%) and maneuvering  outdated technology or slow manual processes (42%)

Biggest challenge in managing account receivables

Automation is the way to achieve scale. The biggest benefits CFOs expect from  AR automation are improved working capital management (44%) and  improved transparency into cash flow (43%). Other benefits expected from AR  automation include reduced errors, increased AR capacity, and the ability to  accept digital payments (35%)

86% of businesses say improving AR efficiency is a potential source of cost  savings (53% say it is a very significant potential source of cost savings). 

AR Automation Technology

56.5% of SMBs say they currently use accounting software for AR management.  42% also use spreadsheets to manage AR, often along with other tools.  

But utilization of ERP solutions for AR management was much lower with only one  out of four (26%) finance leaders saying their business uses ERP for AR  management. Businesses with higher revenues (> $100 million) also use CRM  tools (48%) compared to only 29% of smaller businesses (<$100 million revenue). 

Within the AR function, as many as 47% of the businesses have automated their  invoicing processes. 33% of firms are also looking to automate invoicing in 2022.  An equal number also mention that they want to automate their cash  application or reconciliation process.  

Credit risk management and collections management also offer significant  potential for automation with ~30% of businesses mentioning that they plan to  automate these processes. 

The below table looks at the percentage of businesses that have already  automated the different AR and finance functions as well as their automation  plans for 2022.

Automation Percentages
CFO Finance Leader

Digital payment options will significantly impact receivables operations in the  next 2-3 years, according to 38% of the finance leaders that we surveyed. Data  analytics (35%) is the other area that most CFOs feel will significantly impact  their receivables operations.  

Here’s a chart depicting what mid-market finance leaders believe will be the  technologies that’ll most significantly impact accounts receivable operations in  the next two to three years.

Technologies that will significantly impact AR
Top 5 factors of AR companies

86% of the businesses believe that implementing AR automation technology is  either very important (63%) or important (23%) to keep pace with competitors.  Competitors providing superior customer service (41%) is one of the main  implications of falling behind the curve in terms of adopting AR technology. 

AR Outsourcing vs AR Automation

Outsourcing AR function to a third-party vendor is another route that businesses  take to tackle AR management. 66% of the respondents said they’ll  be outsourcing AR to an offshore low-cost staffing provider. 41% mention that  they’ll be fully outsourcing their AR function while 25% say they’ll  partially outsource. 

When asked why they’d outsource their AR function, 41% say it helps them scale  quickly. 40% of the respondents also mentioned that it is too costly to  implement AR automation with their existing legacy systems. 36% said the  nature of their business doesn’t lend itself to automating while 20% said  outsourcing helps them lower costs.

Chapter 04

CFOs’ Outlook on Technology


CFO Skill gaps

Investing in SaaS/automation/AI/other digital technology is a priority for  two-thirds (65%) of the CFOs, with 36% of them saying it’s a top priority for them.  Data-driven decision-making, most often enabled by AI algorithms and big  data mining tools, is also a priority for 70% of our respondents. 58% of the CFOs  say the lack of modernization of IT can be a big risk to being able to achieve their  2022 goals and 68% of them believe outdated technology stacks are negatively  impacting their business efficiency. 

The pandemic hit the cash flow of many small and mid-size businesses and  they were forced to shut shop. Offering electronic payment options (34%),  sending invoices immediately (37%), and doing better customer credit checks  (37%) are the top measures that CFOs plan to take to improve cash flow. And  technologies such as AR automation can help here. 71% of CFOs mention that  slow manual processes or outdated technology is a challenge in managing  accounts receivable, a key part of the cash flow process. Scaling for growth (67% 

of respondents say it is one of the key challenges in managing AR) can be  difficult without automation tools in place. 

When asked specifically which AR functions they place to automate in 2022,  most CFOs mentioned invoicing, cash application or reconciliation, and  collections. Invoicing is the most automated function, followed by deductions or  dispute management, and cash reconciliation. ~43% of the firms also mention  that they have already automated reporting and tax management. 

Limited technology skills are the biggest skill gap that CFOs face in their AR/AP  teams. 80% of CFOs say they plan to upskill or train employees to reduce this skill  gap while 78% say they intend to empower their employees with the relevant  tech tools. 

CFOs also see technology investments as a potential means to differentiate  their business from competitors and provide customers with unique selling  points that enhance their experience. Thus, 4 out of 10 CFOs agree that falling  behind the curve in adopting AR technology leads to customer frustration (42%)  and competitors providing superior customer service (41%).

Chapter 05

Appendix


Respondent Profiles

Job title of respondents
Industry segment of respondents
By Revenue of respondents

HighRadius and CFO Dive, a leading finance research organization,  surveyed 154 finance leaders (CFOs: 44%, VP Finance: 15%, Director of  Finance: 29%, and Chief Accounting Officers: 12%) from small and  mid-market businesses (with revenue less than $1 billion in the most  recent financial year) in the US to understand their priorities,  challenges, market outlook, and views on the accounts receivable  function and technology at large. This survey was conducted between 10 Dec 2021 and 14-Jan-2022 by  CFO Dive.  

This report covers insights generated from the survey.

Executive Summary

The role of a CFO, fueled by the rising adoption of technology, has been evolving  to a more strategic one in recent times. However, our survey found that the core  priorities and focus areas for CFOs continue to largely pertain to their domain  expertise—cost optimization, risk management, and liquidity management.  They are also expected to focus more on financial accounting, budgeting,  reporting, expenditure planning, M&A, and compliance management in 2022 as  compared to 2021.  

Investing in technology tools such as SaaS, automation, or AI can be seen as an  enabler to their other priorities such as data-driven decision making and  finance team restructuring. A vast majority of the CFOs (68%) maintain that  outdated technology negatively impacts business efficiency and can be a risk  to achieving their 2022 goals. 

Finance leaders at small and midsize businesses are trying to balance their  traditional roles with new roles such as talent management and customer  experience optimization. More than half of the CFOs (52%) said improved  customer service is the key metric they use to track the ROI of digital  transformation. They also mention that the main implications of falling behind  in adopting technologies such as AR automation are increased customer  frustration and competitors offering a superior customer experience. 

Along with managing customers, finance leaders also have to meet the  expectations of internal stakeholders—the employees. While most CFOs (71%) mention that remote workforce is the biggest factor negatively impacting  business operations efficiencies, more than half of the businesses (52%) are  willing to offer hybrid or full-remote work conditions to the F&A teams.

This concession is likely one of the many they may have to offer to retain and  attract talent. 

With the ‘great resignation’ wave, widening technology skill gaps, and talent  attraction and retention challenges, hiring and talent acquisition is the largest  non-finance area that finance leaders plan to focus more on in 2022.  

In this report, we cover four key areas: 

  • CFOs’ Priorities and Focus Areas 
  • Market Outlook 
  • Accounts Receivables: Challenges and Future Plans 
  • CFOs’ Outlook on Technology
Chapter 01

CFOs’ Priorities and Focus Areas


Cost optimization remains the top priority for CFOs despite all the other hats  they don as modern CFO. 56.4% of finance leaders mention that cost  optimization is a top priority for their business. Across the survey, on various  questions such as parameters for choosing software and reasons for  automating, lower costs figure as a prominent reason for the various decisions  that CFOs take

Next to cost optimization, data-driven decision making and reducing risk are  the other top priorities for finance leaders. The growing volumes of data and the  importance of using it for predicting future events make analytics a growing  field of interest for CFOs. Predictive analytics, machine learning, and artificial  intelligence are increasingly used by finance teams for risk management, fraud  detection, budgeting, and reporting.  

Managing risks becomes essential to mitigate revenue and asset loss. Due to the  increased emphasis on financial risk management and prevention of  cyberattacks and data breaches, finance executives need to keep a tight tab  on operations, data management and handling, and predicting, identifying, and  thwarting risks.

Top Priorities for CFO in 2022

We also asked CFOs whether their focus on areas such as financial accounting,  expenditure planning, and talent acquisition have decreased or increased in  2021 and 2022. Despite CFOs donning new hats, a majority of the finance leaders  mention that their focus on core areas such as financial accounting (59%), cash  and revenue forecasting (42%), budgeting (46%), compliance management  (43%), and financing activities (45%) will increase in 2022.  

27% of the CFOs felt that their focus on financial analysis will diminish in 2022  while 23% feel that their focus on strategic planning will be lower. CFOs’ focus on  M&A activities in 2022 is also slightly higher than in 2021 (33% vs 30%), indicating  a renewal in economic and market prospects.

Key focus area of CFO in 2022

Recommendations

What CFOs Taught us In 2022! Thriving In Times of Uncertainty

Best Practices to Prevent Invoice Scams

7 Automation Technologies Revolutionizing Receivables Collections Today

There's no time like the present

Get a Demo of RadiusOne A/R Suite for Your Business

Request a Demo
Request a demo

The HighRadius RadiusOne AR Suite is a complete accounts receivable’s solution designed for mid-sized businesses to put their order-to-cash on auto-pilot with AI-powered solutions. It leverages automation to fast-track key accounts receivable functions including eInvoicing & Collections, Cash Reconciliation, and Credit Risk Management powered by RadiusOne AR Apps to improve productivity, maximize working capital, and enable faster cash conversion. Affordable, quick to deploy, and functionality-rich: it is pre-loaded with industry-specific best-practices and ready-to-plug with popular ERPs such as NetSuite and Sage Intacct. The HighRadius RadiusOne AR Suite is designed to automate labor-intensive processes while streamlining credit and collections activities for faster AR processing, better cash flow and improved profitability.

Lightning-fast Remote Deployment | Minimal IT Dependency Prepackaged Modules with Industry-Specific Best Practices.

Automate Your Order-to-Cash Today!