Chief Architecture Officer? CFOs Learn to Design Business Growth

Today’s chief financial officers have evolved from back-office accountants to financial architects.

And, given the dynamism of today’s business landscape, the transformation of the finance function couldn’t be happening at a better time for organizations.

No longer confined to the back room, crunching numbers and ensuring compliance, today’s CFO is a pivotal figure in shaping the strategic direction of an organization, explained Jerry Raphael, CFO at Hypori, for the PYMNTS series “A Day In The Life of a CFO.”

“When it comes to the day in the life of a CFO, no two days are the same,” Raphael said, noting that the increased focus on cash flow positivity and a clear path to profitability keeps finance teams on their toes, actively participating in and shaping the company’s strategic direction.

This involves detailed planning, such as determining the number of salespeople to hire, allocating marketing budgets, and selecting appropriate channels to drive growth. By connecting granular details to overarching goals, CFOs can help ensure that financial strategies support the company’s long-term vision.

“We help to lay out that plan from a very granular level and connect the dots up to the various goals from a growth perspective for a given year,” said Raphael.

This evolution reflects the broader trend of CFOs moving from financial gatekeepers to strategic partners within the executive leadership team.

Embracing a Greater Emphasis on Cash Flow and Profitability

One significant change in recent years, driven by fundraising trends and public market pressures, is the increased push toward being more cash flow positive — particularly for younger companies and startups, as well as those operating in the software space. This shift necessitates a more conservative approach to investment and a greater emphasis on robust cash flow forecasting, ensuring that companies can sustain operations and pursue growth even in uncertain economic climates.

“There’s a lot more benchmarking, and a lot more conversation around where we place our bets … it is crucial to understand the ins and outs of what’s coming through the company’s accounts,” Raphael said, noting that “cash ends up being the lifeblood for any growing startup.”

Technological advancements have also significantly enhanced the finance function, enabling CFOs to make faster and more informed decisions. Raphael highlighted the role of integrations between systems and the application of artificial intelligence (AI) in solving complex problems quickly. These innovations, he said, help drive faster results and outcomes, providing the leadership team with timely information crucial for decision-making.

And the digitization of payments is another area where technology has made a substantial impact. Raphael observed that electronic payments have become the norm, largely accelerated by the COVID-19 pandemic. “Today, maybe just five to eight percent of our payments come in through checks,” he noted, underscoring the shift toward digital transactions.

The ongoing maturation of B2B payments not only improves cash flow visibility but also speeds up financial processes, allowing for real-time assessment and decision-making.

Future Trends: CFOs as Business Architects

A high-performing finance function is critical to navigating complex business environments and responding to black swan events, and Raphael emphasized the importance of hiring individuals who are not satisfied with the status quo and who continually seek to improve processes and solve tough problems.

This mindset fosters resilience and innovative problem-solving, essential qualities for dealing with unexpected challenges like the pandemic or financial institution crises.

Looking ahead, Raphael envisions the CFO role continuing to evolve, with more crossover into other business areas. As mundane tasks are increasingly automated, CFOs will have more bandwidth to participate in strategic initiatives and take on responsibilities traditionally handled by CEOs. “What we need is that architect with a vision of automating as much as they can within the finance function,” he said, highlighting the need for CFOs to leverage technology to enhance efficiency and strategic involvement.

And as CFOs continue their onward evolution into strategic partners and business architects, their ability to drive innovation and build better businesses will be more critical than ever.

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