the big battles ahead for corporate finance

advisory board members say it’s happening “whether a cfo chooses to do it or not.”

by the center for accounting transformation
improvetheworld.net

according to a group of corporate finance professionals, one of the most significant issues facing corporate finance teams is refocusing team members toward higher-value work such as interpreting data and advising on issues and solutions rather than allowing them to continue performing rote, manual tasks.

related:  top issues for 2022: talent, time, and transformation

learn more about the center’s audit advisory board or view the center’s transformation courses.

“the biggest risk that is clear to me is to continue the antiquated and outdated people strategies, performance, process, understanding, lagging platform adoption, and not understanding the deep relationships that we need to build instead of keeping the status quo,” offered chris ortega, ceo of fresh fp&a. “to me, that is 100% the biggest risk that we now face in the accounting and finance  space.”

the center for accounting transformation’s finance advisory board met in march to discuss the finance transformation journey and how the center can best assist with challenges facing finance teams.

during the discussion, advisory board members identified several critical issues to consider. in addition to embracing change and adapting more quickly, finance professionals face software consolidation matters, staff optimization problems, and, like most in accounting, recruiting and retention concerns. ortega termed financial team’s concerns the five ps: people, processes, platforms, partnerships, and performance.

donny shimamoto, cpa, citp, cgma, the founder and managing director of intraprisetechknowlogies llc, added a sixth at the end of the meeting: purpose. shimamoto, who also founded the center, said, “we’re seeing a lot of literature and articles about the connection back to purpose. we’re doing that as well, at the center. accountants—and everyone at our organization—should be here to help give clients peace of mind, vision and clarity, and hope; and serve to help improve the world.”

the center created the finance transformation advisory board to help guide strategic direction, services, and program planning. the includes:

• jennifer elder, csp, cpa; owner/ceo, the sustainable cfo: elder is an executive coach who helps smart professionals transform from technically talented to strategically savvy. she has presented to more than 15,000 people in all 50 states and nine countries and is the co-author of “faster disaster recovery” and was named one of the top 25 women in accounting by cpa practice advisor in 2018.
• angela k. ho; senior vice president, chief accounting officer, oceanfirst bank n.a.: prior to joining oceanfirst bank, ho was vice president and controller of northfield bank, and previously held positions as an accounting policy manager at signature bank and as a senior associate at kpmg llp. she earned a bachelor’s in accounting from the university of massachusetts amherst and an mba from the wharton school at the university of pennsylvania.
• jessica iennarella, cpa/cff, cfe; controller, state bar of arizona: iennarella currently focuses on interdepartmental collaboration to improve financial reporting and analysis. as a graduate of the aicpa’s 2016 leadership academy, she is passionate about developing and evolving the profession. iennarella currently serves as the chair of the arizona society of cpas’ leadership & growth alliance, is the immediate past chair of the aicpa’s young member leadership committee and an at-large council member of the aicpa.
• chris ortega; ceo, fresh fp&a: ortega’s accounting experience began with ernst & young, and he has now been working in saas (software as a service) in accounting, finance & fp&a for more than 15 years. in his most recent role, ortega served as vice president of finance at an artificial intelligence and machine learning company, leading the accounting, finance, and fp&a operations. his company, fresh fp&a, focuses on people, processes, platforms, and partnership business transformation.
• steve player, cpa, cgma; founder and implementation director, future ready finance: in addition to serving as the managing director of future ready finance, player also leads the beyond budgeting round table north america (bbrtna), working with companies to implement continuous planning processes. with over 30 years of experience in improving performance management, player co-wrote “future ready: how to master business forecasting and beyond performance management,” and five other books.
• mary yetto, cpa; assistant controller, goff capital, inc.: with her bachelor’s and master’s degrees in accounting from texas tech university, yetto began her career as an audit associate with kpmg llp and then became a senior auditor with hartman leito & bolt llp. she was an assurance manager with bdo usa, llp, served as assistant vice president for a private company and is now in her current position. in 2018, yetto was a 40 under 40 honoree from the fort worth business press.

1–finance professionals must embrace advisory

a key takeaway for many was that they and their finance teams needed to move away from the nuts and bolts of the finance function, which all agreed could mostly be automated, and take on critical data interpretation and guidance.

“finance transformation is happening, whether a cfo chooses to do it or not,” player said. “it’s out there. it’s happening. and our question is, what role we play, if any, in helping the evolution or guiding people through the evolution.”

elder posed the question “how does finance have a bigger impact?” answering with, “we have to reach out. people are afraid of us because we like numbers and that scares most people. going out to see people in their environment really is a chance to make those stronger connections.” she added, “if you’re going to be in finance, you have to understand the business, not just how you track the business.”

ortega agreed. “all these traditional things that you learned in business school are out the window,” he said. “business has completely changed. the value-add is all these things that you didn’t learn in business school: the art of storytelling, turning complexity into clear, concise conclusions, partnering inside the business, speaking the business language, being empathetic in your day-to-day decision making…being connecting to the business…fp&a doesn’t mean financial planning and analysis anymore. fp&a means financial partnership and advising. that’s what businesses need. they need advisors to partner with who navigate changes, uncertainty, and everything.”

2–get on board with automation—fast

another key area the group identified as concerning was the slower rate at which finance teams appear to be adopting technological advances, which, they all agreed, would free up their teams to do more higher-value advisory work.

“anything that’s routine can be automated,” elder said. “i think, in many cases, we’ve made the use of technology to be something big and requires a huge investment of money. and that may be the way it was, but that’s not the way it is today.”

the group agreed that using technology for automation yielded a benefit many don’t consider when looking to deploy solutions: the opportunity to better leverage existing talent to add value within the organization. however, for those employees who don’t wish to learn new skills or processes, there’s an obvious disadvantage.

“technology is moving a lot faster. so, allow those people the ability to upskill,” ortega said. “a lot of times, when i talk about ai or machine learning doing people’s jobs, i don’t ever say it’s going to take your job. but if you don’t have the appetite to upskill or find other ways to leverage what you want to do, you’re going to be obsolete.”

for some, the most difficult aspect of adding automation is determining how to start and where to begin.

elder added, “one of the places i would start is i would go to people and say, ‘what do you do that’s the same every single day?’ that’s the sort of thing that can be automated, and then you can upskill them into positions that have more value.” she offered to the group to ask their coworkers, “’if you had more time, what other things would you like to work on?’ most people have other tasks that they would like to do. and you can present it to them from that perspective, ‘well, if we automate what you’re doing now, you can work on these other things.”

another way to approach process changes is to go directly to an it department, which is how iennarella said she prefers to handle it. “i sit down with our it department and flesh out how i think it should work, but then i always run it by staff to say, ‘this is how i think it should work, but i don’t do your job. so, what am i missing if we roll it out this way?’ and it makes them excited about getting it on board,” she said.

while outsourcing didn’t seem to be immediately popular with the advisory board, they conceded it is either already in place or will be soon.

“all of us outsource, we just don’t realize we outsource,” player said. “because third-party providers are using offshore operations… so, it’s coming, whether we choose to have to physically locate somebody there or not.”

3–use ai as an opportunity to improve your team

as the advisory board discussed technology and automating processes, they also discussed the human effects of ai.

ho shared a real-life example of an employee who preferred the manual processes and did not want to use the technology to automate her tasks. ultimately, the employee decided to leave.

“there were so many other value-add activities we wanted her to be working on, but because she was manually entering the information, she couldn’t progress on her other projects,” she explained. “many jobs will be eliminated just by technology, and if we aren’t proactive with our teams and trying to help those who aren’t as prepared or who may not have as many resources to reinvent themselves, they really will be out of jobs.”

agreeing, ortega added, “leverage technology, leverage automation, leverage ai, leverage machine learning. leverage what’s already out there and focus your people on those high-value activities, like communication, collaboration, and connecting in the business.”

another way to better engage employees is to focus on each person’s talents and goals, the group said.

admitting to being goal-oriented with many professional aspirations, iennarella said, “i try extremely hard to not put my ambitions and perspectives on my team.” adding that she is respectful of the fact that for many people, lofty professional ambitions are not their primary objectives in their jobs.

ortega cited a study that showed people who deployed ai were eventually able to repurpose 80% of their team into higher value activities for the business. he said, “it’s about having the conversation and providing the person the opportunity to say, ‘hey, look, this is what we’re finding. we can upskill you here. do you want to do this?’ and if you don’t want to do this, then that’s a whole different conversation.”

4–give your candidates purpose and room for errors

the great resignation has hit the accounting profession particularly hard, including corporate finance teams. the group offered the more common tips, like offering increased flexibility and providing opportunities to grow and learn. however, they also suggested catering more to what new hires want.

“people want the ability now to be able to build and shape,” ortega said. “they want to feel like pioneers. they want to be empowered.” he added that it’s key for recruiters to allow candidates to be forthright, honest, and authentic about where they are and where they want to be so they can work on engaging assignments and know their work is impactful. he continued, “you get your credentials, you get your cpa, you got your badge of honor, you got your cost in there. but what college students are looking at now is, ‘i want to be involved in the strategic decision-making process.’

“i think it’s a great opportunity, if you are able to meet those students where they are with their perspectives, their passions, their talents, and not just what they want out of a company, but what they want out of their life.”

the advisory board also suggested allowing new hires to sometimes fail.

“i think we have to, as leaders, we have to set that tone for people to say, ‘i don’t expect you to be perfect,” elder said. “i don’t expect you to have all the answers. i do want you to try. try to find the answers.” she added that the willingness and ability to learn was critical because “we’re dealing with so much change.”

“i wake up every day trying to fail,” ortega said. “i look to fail because there’s only two options: i’m either going to learn from it or i’m going to win from it. you only lose if you don’t learn.”

elder said allowing room for error teaches problem-solving skills. “before, i might have the answer and i could just rap it off the top of my head,” she explained. “but that doesn’t help them. that teaches them to come to me. and i don’t want that. i want self-sufficient employees.”

“when i first got certified, if you got your license, you were golden for your career,” elder continued. “not anymore. that’s now the entry to the profession. in order to advance to become partner or to become cfo, you have to have communication skills, decision-making skills, leadership skills…none of this is taught for a degree…it’s not just debits and credits anymore. we are a customer facing, customer service organization.”

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in summary, the advisory board agreed that corporate finance professionals should embrace technology and automation to allow their teams to play more critical advisory roles, which would yield more seats at the decision-making table, enabling greater room to give recruits more purpose in their positions.

“it doesn’t matter what generation you’re in, we all want to have an effect on the world,” elder concluded. “we all want to know that we matter. post covid, we’ve seen how fragile life is. the war in ukraine is also showing us that things aren’t as stable as we might think they are. so, demonstrate to people that you can have an honest effect, not just by doing financial state

“you can make a difference in people’s lives.”

posted on april 21, 2022