The digitization of business and commerce has left few things untouched.
And the CFO role, as well as the finance function more broadly, is one of the areas most transformed by digital progress — moving beyond traditional accounting and budgeting tasks to serve as a true partner to the business.
“Finance is essential for any strategic decision. You can’t make those decisions without understanding the financial implications because the finance organization is that strategic thought partner to the business, providing clarity on financial outcomes of the decisions made,” Ashley Mehlman, CFO at Simpro, told PYMNTS for the series ”A Day In The Life of a CFO.”
This shift is driven by technological advancements, increased strategic responsibilities, and the imperative for agility in an unpredictable economic environment.
In practice, this means that CFOs are integral to shaping the long-term direction of their organizations. They provide the necessary financial insights to support cash forecasting, decisions on investments, new revenue opportunities and operational changes.
For instance, Mehlman highlighted the importance of periodic financial forecasting, which allows businesses to remain agile and adjust to changing circumstances effectively.
“We have to constantly ask ourselves the question, ‘can my financial technology support our rapid growth?’” she explained, underscoring the necessity of giving key stakeholders across the company real-time insights about where their spend is, and where the company is going.
The integration of technology within the finance function can extend beyond forecasting tools, and embracing a data-driven approach at a high level enables more informed decision-making and resource allocation across any company, providing valuable insights into areas like marketing metrics and sales performance.
“Data is so valuable to then be able to pivot and make the right decisions that will drive us forward,” said Mehlman.
That’s because the adoption of sophisticated financial systems facilitates a single source of truth for data, which is vital for cross-departmental communication and collaboration.
“The next piece is aligning on training your key stakeholders. We need our other execs to utilize the system and go into it, so we need to make sure that they’re trained properly on it so that we get the best use out of that system,” Mehlman said.
CFOs must also be adept at risk management, ensuring that potential financial pitfalls are anticipated and mitigated.
Mehlman outlined several key risks, including liquidity, technology and broader economic factors. “You don’t ever want anything with your cash to catch you off guard,” she noted. By maintaining a rigorous cash forecasting process, finance teams can ensure they are prepared for any financial surprises.
And in an era marked by black swan events such as the global pandemic and economic downturns, the CFO’s role in crisis management has become more pronounced.
Mehlman highlighted the importance of having a robust FP&A team and maintaining a proactive approach to cash forecasting. “If you’ve already got that forecasting muscle built with your FP&A org, you are going to be able to quickly pivot and analyze those key pieces and provide answers to the people that need them and then act on them,” she explained.
The evolving nature of business software and digital solutions has also influenced the skills required for finance professionals. Mehlman stressed the importance of adaptability and a continuous improvement mindset. “Your people have to change with [technology],” she said. “We have to be open to new ideas; we have to want to change the way we do things.”
For aspiring CFOs, Mehlman advises cultivating curiosity and building strong relationships with key stakeholders. “Finance is not successful in a bubble,” she remarked. Understanding the broader business context and maintaining open lines of communication are essential for effective financial leadership.
Looking ahead, Mehlman sees technology playing an even greater role in the CFO’s toolkit. Staying informed about industry trends and technological advancements is crucial for maintaining a competitive edge. She also values the insights gained from networking with peers and industry leaders, which can provide a broader perspective on emerging practices and solutions.
Ultimately, Mehlman’s vision for the CFO role is one of collaborative leadership and continuous innovation. “It’s about making sure that your finance leaders share your vision, understand the overall business vision, and ensure that the executive team knows the finance organization has their back,” she concluded.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
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