Custom Image

How can the modern-day CFO be more successful?

What you’ll learn


  • Learn how technology for CFOs led to the transformation of their roles
  • Identify tools and techniques for modern CFO
  • Learn how adopting corporate treasury software leads to better outcomes

What do CFOs do in treasury?

The traditional role of a CFO

CFOs play a significant role in planning out the financial growth path, upholding and building flexibility within an organization. Traditionally, a CFO was associated with fields such as controlling and financial accounting. And the majority of their time was spent on non-finance-related activities, driving the organization towards data-driven strategic decisions.

In a global survey conducted by McKinsey, CFOs were asked about their responsibilities and what do CFOs do. 41% of them reported spending a maximum amount of their time taking care of non-finance activities, which are as follows:

Highradius

How has the role of CFOs evolved over the years?

Understanding how the CFO role has evolved and where it’s yet to go provides the unique opportunity to develop new competencies while mastering traditional ones – and rising to the challenge of becoming a comprehensive CFO. For instance, traditionally, CIOs were the buying authority for all new technology. However, today, the CFO’s role is evolving as they are becoming the main technology buyer, especially making the key decisions for considering/implementing global treasury solutions and corporate treasury software because of their high involvement in decision making, cash forecasting, and planning.

Agenda of a modern-day CFO

Highradius

How has the role of CFOs transformed with the outbreak of COVID-19?

During uncertain times, the CFO’s role typically changes with the rise of risks and responsibilities. With the outbreak of COVID-19, CFOs have taken the lead in digital transformation at their companies by becoming the ‘catalyst of digital strategies’. Technology enables CFOs to keep a close eye on liquidity and take proactive steps to prevent and mitigate risks. These capabilities have become more important than ever given the abrupt and severe volatility that many companies are experiencing during the pandemic.

A survey by Mckinsey stated that 88% of CFOs have increased their implementations of automation and AI in their companies with the outbreak of COVID-19. Additionally, the ACT (The Association of Corporate Treasurers) conducted a survey in 2021 that found 23% of treasurers increasingly invested in automating treasury functions, and 47% have begun investing in automation and CFOs software in 2021 alone.

Impact of the pandemic

With the confrontation of the COVID-19 pandemic, many companies across fields and areas share that this pandemic has added momentum to their digital transformation. The impact of lockdowns and extended working periods from home acted as an acceleration of the digital journey. Different survey respondents echo this, with over half (56%) encouraged to accelerate their digital transformation by the pandemic.

Highradius

Traditional role vs. the modern role of the CFO

Traditional roles and responsibilities of the CFO

  • Finance leader: Strong accounting skills and a singular concentration on a company’s financial statements.
  • Finance expertise: Financial savvy but lacking in skills such as analytics and disruptive technology.
  • Work from behind: Working primarily behind and with limited communication skills.
  • Siloed operation: Working in solitude with few interactions with business leaders such as the CIO is the norm.
  • Sheets and legacy systems: Maintains company financials by working on legacy systems and dashboards.

Modern roles and responsibilities of the CFO:

  • Business Leader: Has a broad understanding of the company’s operations and participates in strategic initiatives.
  • Strong analytical skills: Using data from corporate treasury software to generate insights that lead to predictive, self-correcting, and intelligent decisions.
  • Effective communicator: Frequently connects with others and collaborates with the CEO.
  • Focuses on technological platforms: Decisions are made using global treasury solutions and AI-based dashboards.

Which tools for CFOs help them to evolve and ensure the success of the treasury?

How does modern corporate treasury software aid growth?

Treasury software is beginning to reshape the role of the CFO. With AI and machine learning, CFOs are taking small steps toward digital workflows leading to becoming more engaging with tech services and offerings than ever before. Digital technologies or digital tools for CFOs offer them a powerful opportunity to enhance and stimulate decision-making, which depends on the accuracy, availability, and flexibility of data, and flexible/scalable technology support.

Challenges in digitally transforming treasury

Data is vital to the digitization process. A global survey conducted by J.P.Morgan with 130 treasury professionals shows that companies are investing and enhancing their data skills to support their transformation. Some of them describe data accuracy and availability as the prime challenge, while 60% see it as one of their two biggest treasury challenges that include troubles like ‘wet signature’ authentication. Deglobalization pressurizes companies for an extended time which requires flexible support from the treasury for their strategic responses. Moreover, cyber-security stands out as an emerging risk. Corporate treasury software has enabled a smooth digital transformation for working during the pandemic with risks that require well-built safeguarding to stay protected.

Benefits with automated cash forecasting 

Cash forecasting automation eliminates manual work and allows staff to focus on more high-value tasks with:

  • Better visibility over cash
  • Effective and timely decision-making
  • Reduction of cost in business
  • Improved risk management

What are the benefits of adopting technology for CFOs?

Certain crucial parts of the transformation are likely to be overlooked without the CFO’s leadership: Managers will be frustrated because there would be no relevant baseline against how to measure progress in their performance efforts. CFOs need to use the CFOs’ tech stack to play a stronger role in company transformations because the involvement of the CFO can lead to better results in terms of improving the organization’s overall performance.

It leads to better outcomes

Highradius

Treasury tools for CFOs help them assess which businesses in the company’s portfolio are best positioned to exploit growth pockets using data granularity. As a result, CFOs are not only better able to create organic growth targets by managing and monitoring performance, but they are also able to develop a clear acquisition and divestiture plan using the information.

In times like these when uncertainty looms big, digital transformation can help CFOs to become strategic. Schedule a demo to learn how AI-based global treasury solutions can help CFOs focus on adding value to the treasury, maximizing growth, and making a business more resilient.

There’s no time like the present

Get a Demo of AI-enabled Cash Forecasting Software for Your Business

Request a Demo

Request Demo Character Man

The HighRadius™ Treasury Management Applications consist of AI-powered Cash Forecasting Cloud and Cash Management Cloud designed to support treasury teams from companies of all sizes and industries. Delivered as SaaS, our solutions seamlessly integrate with multiple systems including ERPs, TMS, accounting systems, and banks using sFTP or API. They help treasuries around the world achieve end-to-end automation in their forecasting and cash management processes to deliver accurate and insightful results with lesser manual effort.