Everyone realizes that the way people do business in the corporate world has changed due to the Covid virus. What remains to be seen is how many of those changes will remain once the world fully re-opens. Here’s how I see the CFO role changing.
The biggest change across all functions is the realization that not all business needs to be done face-to-face. This realization has been coming slowly over the past few decades, as technologies advance and companies tighten travel budgets. However, Covid forced people to conduct business apart, and the results have been, in some cases, superior. There is still no replacement to face-to-face interaction in building relationships, but these relationships can be maintained remotely.
What does this mean for the CFO function? Without the need for someone to be in the office 5 days a week, different employment models become more feasible. The fact is that many small companies don’t need a full-time CFO, due to the complexity of the business. Someone who is available all the time but only present in person occasionally is a realistic option. In the returns-focused startup world, money that isn’t spent on people who don’t build or sell can be used to hire such resources or extend runway.
In the past year, we have become wholly dependent on internet connectivity and collaboration tools. Everything is virtual now, and this applies especially to the finance function. Accountants don’t tend to be the most forward-thinking people, and I am aware of many settings in which paper is still a critical part of the monthly process. Not being in an office has forced people to think virtually – and be more organized. The CFO who is comfortable with, and even embraces, new technologies will be the one that has an edge. In my firm I keep no paper – anything that arrives in the mail (usually government docs) that needs to be saved gets scanned and shredded. I have a standard file structure that I use with every client, so I know where things are (or should be).
This change is another in the favor of the fractional CFO – we’re used to virtual work, file sharing, esignatures (I’ve been using them for 15 years and have run across organizations that still don’t trust them!), and every possible use of a PDF.
Being forward thinking will also enable companies to attract younger talent – no one wants to work for a company where you will have to learn obsolete tools, such as a server-based ERP, or be heavily reliant on Excel or other applications that aren’t built for sharing.
A fractional CFO also syncs well with another discovery of the Covid-era – that work doesn’t have to be performed within certain hours. Flexibility in schedules will result in a more productive team and attract more motivated talent. This doesn’t mean that people will be on 24/7 – learning to set boundaries in this new paradigm will still be largely up to the employee.
As a perfect example of the success of the remote and fractional CFO, I supported a PE-backed SaaS company for a year, starting immediately after lockdown and ending with the successful sale of the company to a strategic buyer. To this day I have only met in person ONE member of the management team – something that will change when we all meet in Austin next week for a deserved celebration.