CFO evolution held back by lack of technology

 In an economy marred by global disruption and continued uncertainty, CFOs and finance leaders have become one of the most important members of the business comments François Lacas, Deputy COO at Yooz


hanks to the global pandemic, CFOs have evolved from simply supporting the business through tough times, to delivering tangible value through data-driven insights.

According to a PWC study, a quarter of financial directors have become leaders in digital transformation thanks to their position at the centre of all corporate functions.

But a lack of tech investment, or in less-prioritised areas, is restricting the CFO’s ability to support business direction, leading to significant risk and stalling growth.

For CFOs and finance leaders, the pandemic has reiterated the need for better tech investments, not just more of the same.

François Lacas, Deputy COO at Yooz

The many faces of the CFO

The position of the CFO was already becoming much broader before the pandemic, witnessed in the amount of CFOs that have gone on to become CEO in recent years, moving from an number analyser, to having much more strategic input.

And it’s really no surprise at all. CFOs have skills that are vital in moving a company forward, especially when the chips are down. They are specialists at understanding and relaying data, trend spotting, and connecting the dots of the financial consequences of decision making.

As a result, CFOs are almost becoming expected to go outside of their usual remit - from the welfare of their employees to coming up with ways to grow the business sustainably. This remit has also started to include having a say in the technology and software used through the businesses.

The shift to remote, hybrid, and home working has seen millions of pounds being spent on new hardware and software systems capable of keeping staff working. Yet the ROI in new technology will always be a top priority, and it’s up to the CFO to decide which technologies produce good value for money.

Indeed, there’s one area in particular which is still lagging behind. And it happens to be right underneath the CFO’s nose.

Where’s the tech?

An absence of new technology is leading to critical human and admin error throughout the entire finance department, ultimately constraining a business’ ability to achieve value from financial data.

The time taken to manage, process and validate payments is getting longer in an environment where cash flow and financial forecasting is the single thing keeping a lot of businesses afloat. But there are technologies available to help rid teams of these issues.

A 2021 survey found just under one-third (32%) of businesses said reducing accounting errors would be the biggest achievement for automation to be adopted, closely followed by better financial control (30%).

Both of these reasons reflect the need for technology to transform the role of the CFO and, subsequently, wider benefits for the business - including the elimination of late payments, a digitally-led sustainability drive and a reduction in the amount of fraud and cybersecurity threats.

Proving the value

If return on investment is the sticking point, then CFOs don’t need to look very far to prove it.

Automation in accounts payable, for example, has dramatically reduced the cost-per-invoice. Whereas Gartner would say the cost of manually processing an invoice could go up to £25, automated invoice processing has been proven to reduce this to as little as 50p per invoice.

And it’s not just the CFO’s role which is being transformed with technology. Automation has also helped take away the mundane, repetitive, and time-intensive tasks such as data entry and validation away from finance staff, freeing up their time to do more liberating tasks such as strategic planning and handling supplier relations.

As cyber-attacks and fraud cases have increased, the CFO has also had to have a firm handle on the protection of sensitive data as well as keeping an eye on ever-changing financial compliance laws.

Attacks against the financial sector increased 238% globally from the beginning of February 2020 to the end of April, according to Allianz’s Financial Services Risk Trends report.

Utilising technology will allow security teams to detect compliance violations automatically and in real-time, halting cyber issues before they become a problem. With automation providing a wall of defence for finance teams, signs of fraudulent activity can also be detected at a better rate to prevent unauthorised payments coming out of the business.

CFOs can spearhead growth

The role has changed. CFOs are now expected to take the lead on digital transformation projects and the integration of new technologies, and not just the financial report of the business.

The knock-on effects of the global pandemic and the pressure on businesses will continue throughout the next few years. But businesses can ease the strain by allowing CFOs to take the lead in their newly defined role and recently uncovered skillset - underpinned with new technology to help them along the way