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June 23, 2016

Finance CFO Introduction (Series 1 of 5)

When you’re a CFOno matter what company you happen to work for – it’s hard not to take a straight line finance perspective. As the CFO of Determine, I’m constantly faced with the challenge of balancing the requirements of finance and accounting with the needs of procurement and legal. After all, they are our customers too.

I followed the recent series of blog posts by Kelly Barner that Determine ran on procurement maturity. It is interesting how clear your own viewpoint becomes when you read or hear one that is different. I’m not saying that there are no parallels between finance and procurement — there certainly are — but the really interesting points are where the differences illuminate our own opinions. Differences create tension and interest, not to mention an opportunity for each group to learn from the others by getting a better understanding of the reasons and priorities behind their approach.

So let’s engage in a little discussion…

I work at a company that sells a Source to Pay (S2P) solution, and yet sometimes I feel frustrated because we don’t always “take our own medicine.” Our team is so busy focusing on the efficient procurement, financial and legal concerns of our customers that sometimes we let our own opportunities for operational improvement go by the wayside.

Now, I could spend a lot of time talking about the Determine solution here. It is, however, far more interesting to make sure people come away knowing more about the solutions available to finance teams — and how they can enable interactions with internal functions specific to a company’s particular perspectives and priorities.

We have to help the organization plan for the unknown with the best ‘knowns’ available to us at any given moment.”

Forget the old adage about “the round hole.” Finance is a square peg in a completely fluid business environment. Our bread and butter is spreadsheets, sums, formulas and (perhaps more important than anything else) consistency. The fact that successful operations require us to be flexible forces us to strike a balance. We have to be able to help the organization plan for “unknowns” with the best “knowns” available to us at any given moment.

CFOs understand that we are never going to have the luxury of making decisions under fixed, predictable circumstances. Besides, a completely level playing field wouldn’t give us the opportunity to demonstrate that our skills are better than the finance teams of our competitors. What we want is to understand the rationale behind the recommendations and decisions we are asked to provide. What will the cash allocation be with each qualified alternative? Any assumptions (and we accept that assumptions are necessary, if vexing) need to be based on true cost commitments, revenue and cash flow. Just because you can’t be perfect doesn’t mean you shouldn’t aim for excellence. The more accurate the input, the more likely the output will be what you intended.

Even in a fluid environment (or maybe I should say especially in a fluid environment)  technology is the key to transcending unpredictability. Technology gives finance visibility, centralization and real-time access to information. The question, “Where are we trending against budgeted projections?” should prompt a fast, fact-based answer, not an awkward delay followed by qualified fuzzy math. We expect to be able to track savings, not quibble over the difference between negotiated versus realized. If I can’t see it on the bottom line, as far as I’m concerned, it didn’t happen.

Look for tools that help you do the following:

  • Get an accurate picture of your company finances, in real time.
  • Have better control over cash flow.
  • Keep all departments focused on managing against their budgets.
  • Know how you’re performing against spend and wider Source-to-Pay KPIs.

As CFOs, we all know that staying on budget is much easier when you can keep track of with monitoring that shows where the money is at all times.Determine’s Finance Analytics help you see money, in real time, wherever it is. It’s all your numbers across corporate activities displayed with analytic abilities that turn the figures into insights so you can improve bottom-line impact. Budget Management also helps you stick to your planned spend and strengthens compliance.

There is plenty to share on this topic, and in the coming weeks I’ll be putting out a blog series of my own – taking on the same topics that were covered in the procurement series: savings, compliance, risk and collaboration, but from a uniquely financial viewpoint.

* Finding the perfect solution is easy with our diagnostic tool. Answer two simple questions, and we’ll help you identify your possible choices. Diagnose your needs now.

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