How CFOs Are Becoming Chief Value Officers

The operations of today’s businesses have transformed over the past few decades.

While this evolution reflects broader changes in the business landscape driven by technological advancements, globalization and an increasingly complex regulatory environment, it is also reflected in the changing nature of the roles and daily responsibilities of top executives, particularly the chief financial officer.

“The role of the CFO has come more to the forefront,” LiquidX CFO Abhishek Khandelwal told PYMNTS for the “Day in the Life of a CFO” series.

Given the challenges within the contemporary macro backdrop, firms are increasingly focused on optimizing their growth from a cost and revenue perspective, and that “brings the role of the CFO to the forefront, doing exactly what we are supposed to do,” Khandelwal said.

Once primarily tasked with bookkeeping and financial reporting, even budgetary gatekeeping, today’s CFOs are stepping into the limelight as strategic partners who play a role in shaping the future of their organizations and driving value creation.

“Chief value officer, or CVO, might be a more suitable title in the future for this position where you’re looking at not just financial analysis, reporting and controls, but value creation and how to use those resources to drive value creation for the company,” explained Khandelwal. “It’s critically important to strike a balance in being a financial steward of the company and at the same time supporting the innovation that can drive future growth.”

One of the most significant drivers of change for CFOs has been the rapid pace of technological innovation. Digital tools and platforms are reshaping how companies operate, offering new ways to analyze data, automate processes and interact with customers.

Navigating Technological Transformation Means Embracing Innovation

CFOs are at the forefront of this digital transformation, implementing technologies like artificial intelligence and automated solutions to streamline operations and enhance decision-making.

Khandelwal explained that the macro environment during the pandemic led to a surge in available capital, which triggered fierce competition for talent among companies, particularly in the tech sector. Smaller firms found themselves grappling with resource constraints amidst heightened demand for skilled professionals. This scarcity of talent spurred innovation — and investment — in automation, with technology becoming a strategic asset.

“Turning to automation transformed our finance department at LiquidX,” he said. “Things that used to take hours, for example analysts spending around 80% of their time pulling data and not analyzing it, are much more streamlined. It has totally transformed jobs, freeing up valuable time for more strategic exercises.”

By harnessing technology, CFOs can drive operational excellence, optimize resource allocation, and deliver unparalleled value to stakeholders, he said. This is doubly so when digital investments are viewed through the lens of long-term strategic objectives, aligning with the company’s vision and roadmap for sustainable growth.

“We’ve had the fortune of building a very highly tech-enabled system, which we are seeing an increase in demand for,” Khandelwal said. “And, as balance sheets become tighter, leveraging these alternative sources of funding, like working capital, is only going to increase. We are looking to do that ourselves as a company while at the same time supporting our clients’ growth in that area with our own solutions.”

Financial Leadership Is Increasingly Synonymous With Strategic Vision and Innovation

As the role of the CFO expands, so does the need for a broader business perspective. Today’s CFOs are expected to go beyond financial metrics, understanding every aspect of their organization’s operations and how they interconnect. This holistic view enables them to identify opportunities for growth and innovation, driving value across the entire business.

Looking ahead, Khandelwal noted that considering advances in AI capabilities, “reporting through an Excel spreadsheet or a PDF document or even a dashboard is going to be outdated. People will have access to real-time data through a gen AI interface. They can type in any question that they want and get an answer right away… If you want to retain good talent in today’s environment, you cannot give them something to do that is, for lack of a better word, boring.”

“We are in the working capital space, and our clients, when they do hundreds of millions of transactions, these are based on thousands, sometimes tens of thousands, of invoices,” he added. “And as each payment comes in, somebody sits on their desk and matches each invoice to each payment. That is a task that can very easily be undertaken by our AI tools.”

For smaller firms, Khandelwal cautioned that the quality of revenue should take precedence over quantity, underscoring the importance of aligning short-term gains with long-term objectives.

Amidst uncertainty, maintaining a steadfast focus on the company’s growth trajectory and strategic roadmap will be paramount, ensuring resilience and agility in the face of evolving market dynamics, he said.