By Hartmut Wagner
This summer, water usage became the watchword across Europe: use it less and use it wisely. Following major droughts this summer, it’s no surprise that water companies have come under fire following drought-induced water and sewage leaks from their systems. Now they’re playing an unpleasant game – ‘costly catch-up’.
As the summer ends and we head into a tough economic winter, European CFOs across all industries must learn from the mistakes of water companies’ executive teams. CFOs are facing a multitude of risks, which are impossible to predict and mitigate without the appropriate technology. Over the next six months ‘leaks’ within infrastructure will not be limited to water companies battling lasting effects of drought. Instead, for multiple sectors and businesses, meticulous risk management will be essential if CFOs are going to survive an economic backdrop more complex and demanding than the 2008 financial crisis.
A recent Deloitte survey of CFOs found that 63 per cent believe recession will hit within the next year and have already experienced sharp rises in financing costs. The outlook is challenging enough without the prospect of avoidable risks that can be prevented with the right planning and processes.
Hyper automate finance processes
According to a recent Gartner report, less than one-third of CFOs are confident that their technologies are aligned with their requirements for ensuring future business success. Yet, to survive the looming recession and thrive on the other side, technology – particularly throughout the full cycle of the finance function – will be essential.
Interestingly, the ‘Great Resignation’ post-pandemic has further spiked the urgency for CFOs to increase automation throughout business processes. The shortage of employees, which started in restaurants and airlines and has now spread throughout the financial sector, has created a skills gap that senior leaders are struggling to fill. Automating the finance function alleviates the pressure on stretched teams by adding a virtual team member that can take over repetitive and time consuming transactional processes. This can break the negative cycle of further resignations as remaining employees will have more time to focus on strategic decisions rather than being overwhelmed by manual processes.
Take processing invoices as an example. It’s a simple but time consuming task which can often be derailed by human error. Intelligent software can create efficiencies by reducing the time taken to completion and eradicate costly mistakes.
Cash visibility no longer a dream
As the lifeblood of any business, keeping on top of your cash position is an ongoing task, but of heightened importance as we enter an economic downturn. Many businesses still draw their balances from bank statements and monthly, quarterly or annual figures, before consolidating data manually in spreadsheets. Not only is this time-consuming but it simply won’t provide the level of insight required to identify potential risks and ‘leaks’ in infrastructure.
Instead, technology that used artificial intelligence (AI) can provide a clear picture of current and future cash balances and flows, meaning CFOs can understand potential cash flow concerns before they become a reality. AI can forecast potential issues and scenarios facing a business in a way that the human mind alone cannot. This ultimately offers CFOs enhanced decision making powers and therefore better risk management capabilities.
Technology & the CFO
Unlike past decades, the new role of the CFO must be inextricably tied to technology. Interestingly, a Gartner Survey conducted this Summer highlighted that 45% of CEOs and CFOs would cut digital investments last in the face of continued economic disruption. Talent and technology were prioritised over investments in mergers and acquisitions, as well as sustainability, which speaks volumes to the recognition that CFOs are placing on the success of technology for improving efficiencies and protecting margins.
Without a doubt, digitisation and automation will be key to survive the economic downturn and avoid any unnecessary ‘leaks’ in infrastructure. These ‘leaks’ may take the form of a shortage of skilled labour, cash or a multitude of other potential risks. However, no matter the industry or the risk, understanding that technology will be the solution, will be what sets one CFO apart from the next.
About the Author
Hartmut Wagner is CEO and the Chairman of the Board at Serrala. A senior industry leader with deep SaaS and cloud expertise, he draws on 25 years of global technology experience. Prior to his appointment at Serrala in 2022, Hartmut was CEO at Collenda and held senior leadership positions at Micro Focus, Hewlett Packard, and Exact.
About Serrala
Serrala is a global financial automation and B2B payment software provider. By integrating finance and treasury payments into one central end-to-end ecosystem, we create more secure payment capabilities worldwide for enterprises of all sizes. Offering truly differentiated on-premise, cloud, and SaaS solutions, Serrala enables the ‘Digital Office of the CFO’ where all financial processes and payments are automated and optimized.
