Historically, the chief financial officer’s responsibilities were confined to accounting and financial oversight.
However, the rapid pace of technological advancement and the increasing complexity of the global market have expanded the CFO’s role. Today’s financial chiefs are pivotal in driving business strategy, managing risk and fostering innovation.
“Given the macro backdrop, now is a good time to tie together a finance and operating background,” Matthew Mandel, CFO and chief operating officer at Fleetio, told PYMNTS for the series Day in the Life of a CFO.
“Internally, companies are much more focused on how they’re operating than they may have been over the last two or three years,” he added. “And then the implication downstream is that companies are getting a little bit more efficient in how they spend their dollars on purchase decisions.”
As companies strive to optimize their operations while maintaining financial discipline, using operational insights to inform financial decision-making, and vice versa, is becoming crucial to successfully navigating today’s landscape, he said.
“It’s about building a portfolio of risk and reward in the context of unknown macro-outcomes,” Mandel explained. “Once you’ve reached alignment amongst the leadership team, you’ll then have the right measurements in place to make sure that, as the world changes, you can pivot quickly to match it.”
The advent of sophisticated financial software and data analytics tools powered by modern artificial intelligence systems has allowed CFOs to provide real-time insights and forecasts, enhancing decision-making processes across their organizations.
Mandel emphasized the need for finance to partner closely with other functional areas, providing context and data-driven insights to support decision-making. This collaborative approach requires an understanding of each department’s goals, incentives and operational challenges, enabling finance to become a strategic partner rather than a reporting function.
“As you launch new products and target new segments, you have to keep assessing, ‘Do we have good unit economics in those businesses?’” Mandel said. “That’s where tying the finance and the operations together does work well. This world where businesses still have to grow but need to be efficient is a complicated one.”
The shift necessitates a closer integration between finance and operations, bridging financial expertise with operational acumen to drive sustainable growth and value creation.
“Financial statements are the ultimate measure of success over long periods,” Mandel said. “And by that, I mean if we build a great product, customers love it, we retain those customers, then we can acquire customers with increasing efficiency over years, and we are going to see high recurring revenue, high growth, high margins and ultimately a cash-efficient business.”
He emphasized that the challenge coming from the CFO seat is that most of the thousands of business decisions that are happening on a daily, weekly, monthly or quarterly basis don’t come from the financial part of the organization, but rather they come from the operating parts of the organization.
“Finance teams need to be a partner that provides the context of what matters in a growth and efficiency environment to the rest of the organization: data that helps people make those decisions that matter, as well as the right tools to make the lives of those decision-makers easier,” Mandel said.
The ongoing technological shift pushing forward the possibilities of software systems today has not only increased the efficiency of financial operations but also positioned CFOs as leaders in the adoption and implementation of new technologies, highlighting a foundational transformation in the way businesses approach financial management and operational excellence.
Still, while Mandel acknowledged the potential of innovations like AI in streamlining processes and providing actionable insights, he cautioned that its effectiveness depends on clear scoping, data quality and alignment with strategic objectives. Moreover, he highlighted the importance of human capital in driving these initiatives, emphasizing the need for a skilled workforce to maximize the value of technological investments.
“Our greatest asset is our team and their time,” Mandel said. “I’m a strong believer that it takes people with different functional expertise coming together to drive good outcomes.”
Looking ahead, Mandel said he envisions a future where CFOs play an even more strategic role in aligning finance and operations, driving performance and shaping organizational culture. He emphasized the importance of understanding and adapting to the unique cultural dynamics of each organization, tailoring finance and operational strategies to fit within the broader context of the company’s values and objectives.
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