No longer confined to the back office, today’s CFOs are pivotal figures in their organizations.
Gone are the days when CFOs were merely guardians of the balance sheet. In today’s environment, they increasingly wear multiple hats, acting as strategic advisers, risk managers, and leaders in business innovation.
But importantly, they are never going it alone.
“People, process, and tools are the three pillars of scaling a company,” Jim Sparks, CFO at Kalderos, told PYMNTS for the “Day In The Life Of A CFO” series.
“Putting in place a process is free, but it is so critical,” he added, noting that any process should be “repeatable — a wash, rinse, repeat cycle that everyone can follow. Direct communication is the food of champions.”
One of the most significant shifts in the CFO’s role is their involvement in driving efficiencies and championing technology. As companies navigate digital transformations, CFOs are finding themselves at the helm, ensuring that tech investments align with business objectives.
“Tools have greatly changed over the past several years … one of the big issues to address with any finance team is ensuring that everyone is looking at the same data — that we’re not in the business of reconciling data, which can be a fool’s errand,” Sparks said.
And the CFO’s role in evaluating and implementing new technologies, from data analytics to artificial intelligence (AI), is a testament to the CFO’s pivotal position at the intersection of financial management and technological advancement.
“As a finance team, we take a bottom-up approach. It is not a top-down process,” Sparks said.
Despite the sea of change CFOs are tasked with navigating, certain things remain immutable — particularly the value proposition of the role.
“The CFO has to ensure, along with other members of the executive team, that the company is focused on the right things that provide value to our customers,” Sparks said. “The second most critical thing is to work to best position the company to grow at an efficient rate and on an efficient basis, and do that to drive shareholder value.”
This takes agility, he added, noting that “forecasting accuracy remains paramount.”
By analyzing data and financial indicators, CFOs help in identifying new markets, potential investments, and avenues for growth. This strategic foresight is crucial, especially in guiding companies through periods of uncertainty or rapid change.
“The key thing I would recommend to other CFOs is to know your drivers of value,” Sparks said.
Beyond numbers, modern CFOs recognize the importance of human capital in driving organizational success. Sparks explained that finance leaders play a crucial role in fostering a culture of performance and accountability. By setting financial targets and aligning them with broader business goals, CFOs help motivate and guide teams across the organization. Their leadership is instrumental in nurturing talent, encouraging innovation, and building a resilient workforce that can adapt to challenges.
Amid growing complexities in global markets and changing regulatory landscapes, the CFO’s role in ensuring compliance and financial integrity has also never been more critical.
By establishing robust financial controls and governance structures, CFOs safeguard the company’s assets and reputation, ensuring trust among investors, regulators and the public, Sparks said.
Discussing the recent data breach at Change Healthcare, Sparks stressed the importance of data security. He noted that Kalderos was not involved in the breach, and emphasized the company’s stringent controls around data access and its SOC 2 compliance.
Looking ahead, Sparks sees AI playing a role in the evolution of the CFO role — just as it has throughout the trajectory of the finance department.
“The finance function has been dealing with artificial intelligence for some time. I don’t want to say we’re the tip of the spear on this, but tools such as expense management tools in the accounting function [have long been built on AI],” he said. “In a perfect world, I think artificial intelligence won’t replace humans, but it will make humans more effective by unlocking insights and making projections more accurate.”
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