Having spent enough years as head of financial technology at Silicon Valley Bank and now as CEO of Liquidity Group North America, I’ve often come across some tools that growing-stage startups need to adopt to get their work done. The role of CFOs in growth-stage startups extends beyond traditional financial management. The pressure is to be accurate and efficient and build a workflow that reduces the company’s workload without compromising quality. In fact, for many industries, fintech included, modernizing the CFO’s technology stack has become a prerequisite for success.
The CFO’s smart, modern technology stack should include proven methods and embrace innovative tools. These tools should streamline financial tasks and support data-driven decision making. This stack includes advanced solutions for financial planning and risk management, expense management and fund management.
Out with the old
As businesses grow and mature, their financial infrastructure becomes more complex and requires advanced tools to effectively manage financial operations.
“A good sign that you need to update your CFO stack is when your team is performing manual tasks repeatedly or if more time is spent gathering data instead of providing insights,” he said. Rose PunkunusCEO of Sudozi and former CFO of Uber.
Remember that many common technologies that we all loved a few years – or decades ago – are no longer useful today. You should avoid:
- Manual data entry: With the rise of optical character recognition (OCR), voice, and even AI-based content ingestion, manual data entry is a thing of the past. Stamp it when you see it.
- Legacy Systems: Older financial software that doesn’t support API integrations can hinder growth and scalability. Do an audit of your existing systems and find things that don’t work anymore.
- Paper pricing: Not only is it environmentally friendly, but it could also be more efficient and error-prone. If there is paper anywhere in the compliance chain, remove it.
- Individual financial instruments: Tools that don’t offer integration between software can create data silos, making combined financial reporting a challenge.
[A CFO’s tech stack should include] advanced solutions for financial planning and risk management, expense management and fund management.
“Let’s say we’re talking about the procurement process. If the finance team is routing requests to different people for approvals, it’s probably time to get some workflow automation instead of having your finance team reroute emails,” Punkunus said. “In a data collection situation, if you’re constantly pulling data from one place and creating new pivot tables in Excel, see if there’s an FP&A tool that can help consolidate data sources so the team can spend more time extracting information or re-prediction’.
Financial planning and analysis
A critical component in the CFO’s technology stack is financial planning and analysis (FP&A) software. Solutions like Adaptive Design lead the way by enabling CFOs to create accurate financial forecasts, analyze cash flow and make strategic decisions based on real-time data. These tools help identify trends, predict risks and provide financial stability by providing actionable insights.
