The CFO and Automation.

cfo

This week’s series is focusing on the people who can best benefit from accounting automation. I am starting with the accounting department and the different roles within the department. Starting at the top of most accounting departments is the CFO or Chief Financial Officer. If you are a CFO or report to a CFO, my experience has been that they are the ultimate decision maker. Meaning the CFO is normally the person that signs the check to start the process to automate and most times is the person that needs to be convinced that spending the money on automation is a good and useful thing.

The CFO, depending on the size of the company, may be unclear of the pain within the accounting department that is associated to paper. A few years ago I did a survey to CFOs and asked them several questions. One question was how much does it cost to process an invoice? The majority of CFO’s answer anywhere from $1 – $2. Then I asked if there was any pain in the accounting department as it pertained to invoices? The majority said, “No”. In the same company I asked the Controllers or accounting middle managers the same questions. The response to the pain question was, “Yes” and people commented that the pain was at critical levels. Then when asked the cost question, the majority responded, “I don’t know, and I would hate to know how high it is”. Keep in mind that these were different people in the same department of the same company. The CFO and the Controller have different things to worry about, so it is common that a CFO may not be aware of the pain in processing invoices. When it comes to evaluating accounting automation, the CFO may not get immediate benefit from time savings and process improvement. As a CFO you will want to turn your attention to other benefits of automation like:

  • Cost Reduction through a Cost Per Invoice or Cost Per Process analysis
  • Improved Forecasting by reporting on the invoice process
  • Fraud and Risk Protection by eliminating the paper and focusing on who does what in the process
  • Cash Management by a closer look at payables outstanding (especially when attached to a purchase order or the receiving process)
  • Bragging Rights at the CFO conferences by telling everyone you are paperless

The above are what my CFO clients are telling me, and they all revolve around the theme of better reporting and tracking… except for the cost reduction. I haven’t found a company leader that is not interested in reducing cost.

Stay tuned… tomorrow I am going to write about the Controller of Director of Accounts Payable and their benefit to accounting automation.

Buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy


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