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The future for finance has never been brighter. What was once an afterthought within the organization has transformed into a cornerstone of business decisions and steward of strategy. The time is now not just to measure performance but to enhance it. On the surface, building an in-house finance and accounting team is an opportunity for finance executives to put their stamp on the organization. The reality is the essence of your impact is more about delivered value than team assembly.
The ability to attract and retain talent in a competitive labor market will continue to be challenging. A new CFO might be able to source an FP&A analyst from their previous company and promote them to Head of FP&A or a senior accountant and promote them to controller; however, there is a scarcity of qualified talent with the experience to overcome challenges without steep learning curves. With venture or private equity-backed company results scrutinized monthly, quarterly, and annually, wasted time is wasted opportunity in the eyes of your sponsors.
Between the need for headcount plus finance and accounting systems, we've seen many instances where 10% of a Company's revenue is spent on the finance function. Although allocating resources to the finance and accounting team is necessary, overcommitting financial resources without generating essential insights is not scalable for companies needing to scrutinize costs and extract value from all resources.
Suppose you need to hire and train new members of your team, who must learn on the job for an unforeseen time to get up to speed. This dilemma is common, and it can lead to compounding opportunity losses for your finance function and the decision-makers and stakeholders expected to deliver value. It is no wonder that the average CFO tenure at an organization is the shortest of any in the C-suite.
Not to be confused with financial services provided by institutions, finance as a service (FaaS) can supplement an organization's finance team in a range of capacities. On many occasions, companies seek two types of finance support for their business – fractional CFOs for growing companies or those in a transition phase, and fractional controllers or accountants to help close the books and accurately depict the performance of the business.
Fractional CFOs can be a strategic partner for assessing and recommending the best course of action for raising, allocating capital, identifying growth levers, and establishing accountability across the business, but if you already have a finance executive on your staff, it's the supporting cast and tactical resources needed to fulfill daily operations.
There is some crossover, where a Fractional CFO may handle the reporting and planning deliverables and accountants or controllers might provide recommendations and process improvements to billing and collections. Fractional CFOs are helpful for companies that need an executive to lead the finance function temporarily, though they are not the only FaaS option. FP&A specialists, controllers and technical business intelligence experts are other verticals companies could leverage externally to keep pace operationally.
Only 16% of finance leaders believe their finance function delivers best-in-class performance — EY DNA of the CFO Survey
Between the popularity of the Emmy-Award-winning show "Ted Lasso" and Super Bowl viewership surpassing 120 million people, suffice it to say that a football analogy, either form of football, is appropriate and understood by many. When a team hires a new head coach, that head coach brings in coordinators, position coaches, and other assistants from other teams they worked with and, most importantly, succeeded with in the past - in Ted Lasso's case, it is Coach Beard. There is no time spent on identifying, recruiting, or training Coach Beard or the staff of an NFL team. Instead, the supporting cast is dropped into the best-fit role with proven experience and a track record to justify the impact they will have.
Outsourced CFOs, FP&A analysts, and controllers delivering technology-enabled solutions, give companies with limited resources access to experienced finance professionals quickly and cost-effectively. But what if you have several gaps to fill on your accounting and finance team or lack resources beyond a bookkeeper?
For finance and accounting, FutureView brings this same element of a supporting cast to the table for founders, CFOs, and PE firms, with an entire team of proven experts for each aspect of the finance and accounting function – including technical and business intelligence resources to manage data architecture, integrations, and CPM software. These combined battle-tested solutions allow us to deliver value in a fraction of the time it takes to build a team, implement a new system and identify areas of process improvement.
Some of the unique benefits of this finance-as-a-service model include:
Battle-tested processes like monthly detailed forecasting, distributed budgeting with department and business unit leaders, and performance insights foster a culture of accountability that supports even non-revenue-generating departments in adopting a P&L, finance mindset to drive better results across the top and bottom lines.
Expertise in both finance and accounting methodologies, as well as business intelligence capability, data architecture and integrations to ensure there is a single source of truth from disparate systems that might otherwise require technical resources outside of the realm of internal finance and business intelligence resources and skills.
Faster time-to-value with proven resources that do not require onboarding or training to deliver fully realized solutions to enhance the impact of the finance and accounting team as a governor of strategy and not merely a back-office function.
Cost-efficient as shared services and proprietary finance technology combined save massively to rely on external shared services rather than hiring full-time employees with evolving compensation and benefits packages.
Perspective on approaches to business drivers, cost management, cash positions, system recommendations and other areas of expertise with an unbiased mindset.
Scale up as needed to ensure your business and finance function is supported to handle the deliverables and expectations of the executive team, board, and investors.
You may be familiar with usage-based or consumption-based pricing models for software and cloud computing. One example of this is the marketing automation and CRM tool, HubSpot. HubSpot's pricing model is based on the type of features, how many contacts are in your CRM, among other usage factors.
The usage-based pricing model is a win-win for both parties as the customer only pays for what it needs, and grows into further needs with little upfront effort, while the provider has a developed relationship with the customer and can project potential growth for certain customers expected to use more in the future. You will need to adapt to evolving market demands and circumstances, both internally and externally, even those factors out of your control. Having flexibility and additional external support allows you to quickly adapt to shifts in business, technological advancements, and scalable process optimizations.
The availability of key talent and technology adoption are two of the top three issues finance executives feel are impacting organizational health over the next 12-18 months — Russell Reynolds Finance Survey
The overwhelming majority of discussions around 2024 trends in finance and accounting technology is centered around the use of artificial intelligence (AI) and generative AI to support productivity. Although there is no disputing the value of generative AI, the reality is that many finance functions have yet to automate table stakes deliverables like management and board reports, budget vs. actual (BvA) analysis and sales or revenue forecasts. With finance technology, it is best to take a modular approach, starting with the end in mind, and identify dedicated solutions to solve a given pain point. 80% of CFOs said they expect their companies to embed more automation/digital technologies into their operations in 2024, based on Deloitte's CFO Signals Survey.
Technology investments are necessary to automate processes and free up capacity for more meaningful work. Traditionally, a new ERP is thought to be the answer to solve many of the problems facing finance and accounting. An ERP provides multiple applications, such as a general ledger, customer relationship management (CRM) system, invoicing, and inventory management, among others.
Once companies reach $10-25M in annual revenue, there is a belief that the only way to improve the time-consuming processes within the finance and accounting teams, and across the other business units, is to invest in an ERP like NetSuite. The approach had merit 10-15 years ago, when there were little available open APIs or integrations to connect disparate systems. That has since changed, and now instead of forcing a department to use a lackluster ERP module, they can now turn to best-of-breed systems for each of their use cases.
It is not to say that NetSuite doesn't have its advantages for growth companies. NetSuite, which we work with directly, is a great general ledger system that can handle complex accounting structures, consolidate entities and deal with multiple currencies and foreign exchange rates. However, these are typically not the use cases for a $10-20M company that would invest hundreds of thousands and hours of time commitment to implement a new ERP that offers functionality they do not even need.
Additionally, the CRM, a coveted sales and marketing tool, does not have the flexibility and capabilities of Salesforce, garnering 18% market share in the CRM space, according to the IDC. To encourage the sales and marketing team to switch from Salesforce to your new ERP's CRM module would be an endeavor doomed to fail and leave your new CRM module as useless shelfware.
For the finance team, the reporting and planning capacities of an accounting software like QuickBooks, Xero and Sage Intacct are the root cause of pain and source for seeking a new ERP software. However, this is not a strength of an ERP like NetSuite or SAP either as noted by the explosive growth in the FP&A and CPM software space over the last five years.
In contrast, FutureView's combination of data architecture, system integrations, and CPM software expertise, paired with shared finance services, presents an average total cost of ownership (TCO) savings of 44% compared to NetSuite — while delivering the automated reporting packages and detailed budget and forecasting capabilities necessary to align the organization with the PE-firms expectations.
When evaluating finance technology, there are many data pipeline tools available and CPM implementation partners to choose from. One thing when it comes to any finance or accounting software is unequivocally true - garbage in data results in garbage out deliverables.
You must start with a data architecture that aligns to your chart of accounts and how transactions are recorded and accounted for. This critical first step is often overlooked during onboardings, as the implementer is not a true ongoing partner, and expects the client to spell out the requirements to build everything from scratch.
At FutureView, we take a different approach than others such that our clients realize a return on value in a fraction of the time. As a team of finance professionals who have sat in the seat, we understand the nuances the end user desires, foresee the questions that will arise from the executive team and investors, and not only deliver a solution to address those requests but manage the process to ensure nothing is lost in translation between the implementation partner and the internal finance team.
Our shared services span finance, accounting and business intelligence, so if you need a resource to work with budget owners and provide insights to close the gap in variances from results falling short of expectations, or you expanded into a new country or added an entity and need to include and roll up those metrics into the company in the CPM software, we can handle that ongoing customization.
Keep in mind that software is not a solution; it is a tool that requires expertise to utilize and provide value. Having an ongoing partner to manage both the processes and the technical system gives you the foundation to be more agile in your approach and ultimately make better decisions.
FutureView provides end-to-end finance solutions for the Office of the CFO. Our proven processes, backed by finance leaders with decades of experience in the industry, are cost-efficient resources to support future growth and profitability. To learn more about our white-glove finance shared services and how our solutions can rapidly transform your finance function, contact us today.
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