Compared to manufacturing, which embraced automation in the 1960s to eliminate repetitive tasks, the finance and accounting function has been a laggard. But Darren Heffernan, president of mid-market at financial software company Trintech, thinks CFOs are poised to change that by stepping up to lead their organization's digital transformation.
CFOs are "practically co-running the company with the CEO," and their ability to view the business across all functions provides strong support to leadership, said Heffernan, an eight-year veteran CFO at Trintech before assuming his current role.
In an interview with CFO Dive, Heffernan said there is an immediate advantage to embracing digital transformation: closing your books faster. "Numbers are lagging indicators," he said. "It’s all about KPIs that let you predict the future with more certainty than the past. Close the books, shorten the sale cycle. The quicker you get that out of the way, the better, for any company."
RPA adoption continues to lag in finance
Yet finance teams have been unusually slow to robotic process automation (RPA) and other types of digital transformation. RPA is a software program that fits into an organization's accounting function to manage the repetitive recording and reconciliation of specific types of transactions.
"If you look at the manufacturing industry," he said, "they figured out many decades ago that automation was the way to go. We haven’t done that in finance, and it’s only now we’re starting to find the tools." As a result, he said, finance departments have struggled to close their books on time, retain talent, and do away with repetitive, mundane tasks.
When Heffernan started in finance 20 years ago, it was expected he'd to have to work weekends and holidays. "When you’re closing the books, that’s what you have to do," he said. But Generation Z doesn’t accept that premise.
"If you want to attract talent, that’s not the way to do it," he said. "So, modern finance, teams must focus on automating to sustain and grow business, and do what’s being asked of us as finance professionals. We’ve got to make it more interesting for the new talent."
Heffernan thinks CFOs are well-positioned to spearhead digital transformation because of their unique vantage point of the whole enterprise. "By the definition of the role, the CFO is dispersed across the whole organization. They know what has to happen. We live in such a fantastic era of digitalization where everything is possible. And the CFO just has that unique view and visibility into why that should be."
Automation stands to benefit finance teams enormously, Heffernan said. "Most [finance teams] that haven’t adopted tech use Excel in ways it was not designed to be used. Excel is not a system of record or controls, but that’s how many companies are [using it]."
Looking to the future
Heffernan offered two major predictions for new tech trends in 2020.
The first is continued demand for cloud services. "Very rarely now do we come across companies that don’t embrace the cloud," he said. "The cloud will be embraced by many more companies, especially in the mid-market space that may not have known there are tools like ours available to help them."
Second, Heffernan said companies offering enterprise resource planning (ERP) solutions would have greater influence. Those ERP vendors will be "substantially" expanding their offerings, Heffernan said, and finance leaders will look more at consolidation when viewing financial planning and analysis and close tools together.
