Serving the Strategic CFO: Growing opportunities for next-generation tooling

By Phoebe Kitchen, Vice-President, Investments at Venture Capital firm, Inovia Capital

In recent years, the role of the CFO has needed to change. Increased operational complexity has necessitated a role transition from chief bookkeeper, towards becoming the key strategic partner for the CEO. As a result, there has been increased demand for a new breed of platforms to best support their evolving needs, both as a business (no matter the size), and an operator (to drive the implementation of strategic finance). 

Historically, multinational corporations have been well-served by these solutions, where there remains significant space to both bring this functionality to SMBs and mid-market customers, in addition to solving an increased array of use cases. These include; financial planning and analysis (FP&A), treasury solutions, and billing/cash flow management software, to support the work of the modern, ‘Strategic CFO’.

The traditional CFO:

At one time, a company’s CFO would be responsible for balancing the books and little else, due to its time-consuming nature. This is because – even now – much of the CFO’s top-level work is carried out manually, stitching together various spreadsheets and pieces of disparate data. Excel still acts as the main accounting tool for many SMEs, but as companies grow, the volume and complexity increases. Tasks require a larger team of number crunchers to compile data which is expensive, slow, and liable to human error. This is already difficult in still waters, but can quickly become unmanageable as businesses grow and digitise, requiring increased agility to navigate both operational and strategic challenges. 

The strategic CFO:

Nowadays, there is a huge amount of mission-critical data at the fingertips of an average CFO, 

increasing their responsibility to both manage this data effectively, and importantly, drive key insights and deliverables. As a result, the CFO’s role has expanded to include anything from employee operations (e.g. expenses, payroll) to cash flow management and FP&A, where they have become instrumental in big picture business planning, sitting as the trusted ally of the CEO. They therefore require tools which can help them to make decisions and keep pace with their growing remit. 

This need has accelerated in recent years. Firstly, we have witnessed increased digitisation of the underlying tech stack, which drives SaaS demand to upgrade its existing infrastructure in terms of internal processes (e.g. accounting and tax), and payment flows (e.g. invoicing, AP/ARs, payroll). The ongoing shift in buying behaviour from on-premise software to SaaS, has also expanded horizons to the types of software companies are willing to adopt. Finally – and likely most impactfully – a wider incentivisation for digital tooling has been supported by government regulation, with initiatives such as ‘Making Tax Digital’ in the UK.

Tooling up:

We’ve identified huge opportunities for SaaS companies to complete the CFO toolkit, particularly in a more challenging market where CFOs need to do more with less, freeing up their time for more value-add activities which impact a business’ future. The next-generation of tools, like strategic CFOs themselves, must be agile and mission-critical to the functioning of businesses today – demonstrating clear ROI in the functions, processes, and importantly, customers they serve; enabling both “mom and pop” shops and large multinationals to better navigate today’s ever-evolving business environment.

We have increasingly seen the emergence of new solutions driving this innovation across the CFO stack – from FP&A to billings, cash flow management and treasury – and remain very excited about the opportunities ahead, particularly in an AI-enabled world. At Inovia these solutions remain particularly close to our hearts, given the depth of the former CFOs within our partnership, including Patrick Pichette (ex-Google CFO), Raif Jacobs (ex-Deliveroo CFO), and Dennis Kavelman (ex-Research in Motion CFO), where we look forward to collaborating with entrepreneurs of the future.


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