How CFOs can balance their duties in driving startup growth

For people outside the executive suite, CFOs might appear to only focus on financial matters. But over the years – especially after the rapid digitalization driven by the pandemic – these executives have come to tackle complex strategic and operations issues beyond the boundaries of finance.

According to a report by McKinsey and Company, the areas or activities that CFOs oversee have seen a sharp uptick from 2016 to 2021. The share of finance leaders who said they were responsible for investor relations jumped by 20%, while those who said they handled digital activities rose by 22%.

In fact, 81% of respondents in an Accenture survey see identifying new areas of value in a firm as their primary responsibility – and not just managing a company’s finance department.

To succeed in these additional duties, CFOs need to understand how to drive the right changes.

“It’s an exciting job to be in, especially in a fast-paced environment,” says Angelica Diloy, vice president of finance at Indonesian proptech firm Rukita.

Company problem solvers

One major reason finance department heads are seeing a greater share of responsibility is because they know how a company functions from the inside. Thus, it falls on them to lead disruption within the firm.

“Finance leaders are required to have a bird’s eye view to understand how different departments work, as startups move at a much faster pace than traditional companies,” says Diloy. As a result, CFOs end up having strategic knowledge of almost every aspect in a company and play a critical role in planning the short and long-term goals of the firm.

Angelica Diloy, vice president of finance at Rukita / Photo credit: Rukita

That’s why, apart from overseeing fundraising, mergers and acquisitions, and compliance with financial regulations, startup CFOs have also taken the onus on themselves to use their knowledge of the company’s operations to derive insights for future growth.

For example, when looking at the company’s balance sheet, finance leaders can see where the firm is investing its money and the resources that it’s using. From there, CFOs can analyze and identify important growth avenues through the forecasting done by their department. This could come in the form of creating budget allocations and reports, a pertinent topic for many startups considering the financial strains induced by Covid-19.

To effectively draw out these insights, CFOs will need to drive modernization efforts to better equip their teams. Speed is an important factor here, as companies need to quickly gather and consolidate the required data before it becomes outdated or obsolete – as is the case with generating financial reports.

That’s why digitalization – such as creating new data visualization capabilities, increasing access to real-time financial information, and building advanced analytics systems, among others – should be paired with the need for analysis and insights, as it helps firms automate the data gathering process.

Effective structural changes

While some CFOs might understand that driving digital transformation is key to helping them unlock new growth opportunities for the company, not all of them are well-equipped to do so.

For one, some companies might expand their automation capabilities without accounting for their long-term growth strategies and needs.

This happens because in a startup environment, where things change quickly, some CFOs might act on immediate problems instead of looking at the bigger picture.

For instance, CFOs might implement new digital infrastructures to solve the problems at hand instead of improving fundamental capabilities such as procurement management. This means that the effects of such decisions are short-lived and can prevent companies from reaching their true growth potential.

Another study from McKinsey and Company shows that firms with a long-term focus could pull in 47% more average revenue and 36% higher earnings growth compared to those working toward short-term goals.

“If the right structure is not there, any strategy put in place will be delayed or worse, fail,” says Diloy.

Rukita’s finance department / Photo credit: Rukita

To overcome this, digital solutions that enable companies to implement long-term structural changes are crucial. In Rukita’s case, the company sought out Oracle NetSuite’s Enterprise Resource Planning solution, which provides cloud software to automate processes such as finance management, supply chain management, and procurement, among others.

One of the biggest advantages of Oracle NetSuite is that it helps automate daily accounting processes, giving Rukita access to real-time financial data on demand. This ensures the integrity of its accounting processes as well, giving shareholders and customers more confidence in the company’s internal processes.

Additionally, reports can be generated quicker, which speeds up the department’s analysis. The old method that companies often use relies on spreadsheets to complete investor reports, which could take up to two months. But with Oracle NetSuite, Rukita can produce the same report almost instantly, Diloy says.

“It helps me focus more on the main task of being a vice president of finance, which is to advise and give insights,” she says. “When you have the right system, you will love to see the story behind the numbers.”

Becoming an influencer

Startups are always evolving, which means that CFOs will have to adapt as well. As finance leaders grow with their companies, Diloy says that they will have to foster a good partnership with CEOs and COOs to enable a firm’s long-term vision.

In this regard, CFOs should become more than just finance leaders or “firefighters,” she adds. Rather, they should look to be leaders and influencers of positive change within their firms.

“Digitalization is just the beginning of everything a CFO should do,” she shares. “It’s not about the title, but about the legacy that we leave in the company.”

Founded in 2019, Rukita is one of the fastest-growing proptech companies in Indonesia and has served more than 1.5 million occupied room nights. Its mission is to make quality living affordable for the current and future generations of young adults in Southeast Asia by building an infrastructure that integrates technology, homes, and financing.

Oracle NetSuite is the world’s leading provider of cloud-based management software. It enables organizations to manage core business processes with a single, fully unified system, covering enterprise resource planning, financials, customer relationship management, ecommerce, inventory, and more.

For every kind of enterprise, NetSuite is the system to help you grow your business. To find out more, visit its website.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.