Today’s turbulent macroclimate has put the evolving chief financial officer role in the spotlight.
And top finance leaders are rising to the occasion.
“It’s exciting to be in the CFO seat,” Joseph Pergola, finance chief at media software platform Connatix, told PYMNTS in an interview, going on to highlight that no matter the company or the industry, “best practices and financial management” are what drive sustainable success.
In a softening economic landscape punctuated by the recent collapse of Silicon Valley Bank and Signature Bank, it is more critical than ever for businesses to review their growth strategies, identify efficiencies and manage cash flow better.
“Cash is king, and understanding the company’s cash flow, burn rate, and making sure you have the appropriate financial capacity and security is bar none,” Pergola said.
He emphasized that while everything is “sound” for Connatix, it is still important — particularly considering the recent bank failures — to “take another pass through and check what is our delegation of authority. What are our segregation duties? Do we understand our cash management, and are we best optimizing that cash in a secure way?”
A veteran finance leader, Pergola said the evolution of the office from strictly handling accounting functions to serving as more of a holistic business partner has helped organizations realize new avenues for growth.
“[The CFO role today is] not just closing the books, but it really transcends toward that strategic side of growing the business, partnering hand-in-hand with other departments,” he said. “…I pride myself on ensuring the CFO is never a ‘no’ office. It’s a how do we get to a ‘yes’ office?”
Crucial to reaching that “yes” is that “sometimes we need to lock arms and understand risks and opportunities,” he said. “…What does it mean to the business model? What are the near-term sacrifices? How can we integrate [the opportunity] to really be accretive and additive?”
Business leaders today need to have a transparent, high-level view of their operations, one that informs where to continue to invest, where to pull back spending, and how to leverage modern technology to provide an optimal return on investment (ROI) — all areas that CFO involvement can accelerate.
Pergola said that understanding how the business is performing and recalibrating expectations is the first thing he does every day, and that there is a “constant dialogue” between the finance team, the CEO and other leaders.
“We call that our ‘morning coffee,’” he said. “…We’re looking at dashboards to understand our position, understand our forecasting, understand how the business continues to monetize. It’s crucial not only to understand the pacing and how we can best continue to invest and grow, but to do it responsibly without putting us in a predicament or situation where we would need some additional credit.”
When he looks back at his career, Pergola said it is amazing the amount of vendors that exist today and the impact of their technology.
“The tools we have at our fingertips today to remodel the business would historically take [finance] teams months,” he said. “I’m able in real time to deploy investment, redirect resources, and we’ve unlocked our global accounting systems to be able to close the books in six days. That’s unheard of.”
Pergola noted that beyond the helpful bells and whistles, what’s most critical to organizational success is “shifting those manual resources to now looking at insightful finance analytics … Instead of focusing on closing the books, my team can now look at how our product team is building new products and their ROI within the broader portfolio, so we can tell our investors the return across each and every product build level.”
There is an increasingly high-touch, vocal narrative around the pairing of product and investment roadmap, he added.
Touching upon the macro environment and fallout from the banking failures, Pergola said that it will likely delay decision making as organizations take a closer look at risk profiles.
“The positive has been how the industry responded,” he said. “These smaller businesses and startups live and die by such a small amount of dollars in funding, and it’s been great to see how multiple companies have put themselves out there, almost like GoFundMes, to make sure small businesses can still innovate. And we’ve done the same for our customers. We want everyone to sustain themselves through this and thrive in a protected way.”
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