With CFO Turnover At 5-Year High, Treasury Tech Can Keep Finance Teams Going

Written by Jason Mountford
June 2, 2023

At this point, we’ve all heard about the Great Resignation. Pretty ominous sounding, right? While the media is great at coming up with headlines like this, it does reflect a real phenomenon. In 2022, a record 50 million Americans quit their jobs, and the impact has been felt across various industries, departments, and job levels.

Surprisingly, that last division also includes top-level executives. It turns out that – when it comes to the C-suite – the finance department has been most affected. CFOs have been leaving their jobs at a much higher rate than CTOs and CMOs, though the number does get closer when compared to CEOs. 

Still, CFOs are the most likely to leave – in fact, turnover for the chief financial officer position recently hit a 5-year high. 

All this begs the question: just what is going on with CFOs?

cfo turnover

Why Are CFOs Leaving Their Jobs?

There are, of course, the obvious culprits: a potentially worsening economy, high inflation, and the decreased job satisfaction that’s been a hallmark of the past couple of years.

But, besides the Great Resignation, there’s another big change that’s been making headlines: the transforming role of the CFO.  Unfortunately, we can’t find something as succinct as “the Great Resignation” to describe this, so we had to come up with our own term. Let’s call it “The Great CFO Transformation.” 

Whatever you call it, the point is that the days where the CFO was viewed as “just a bean counter” are long gone. Today, the CFO is increasingly seen as a strategic partner to the CEO, the Robin to their Batman, helping uncover data-rich insights and using those to help steer the company in a profitable direction.

So, we’ve got two CFO changes going on simultaneously – it’s easy to draw a connection between the Great Resignation and the Great CFO Transformation. Nowadays, CFOs are expected to be experts in analysis, strategy, as well as investor relations and other areas that don’t directly concern finance. Basically, there’s been pressure to perform, and not everyone has been up to the task.

With a potentially difficult economic road ahead, we can expect CFO turnover rates to remain similar or even increase as companies try and shake up the existing finance team, or find CFOs with more skills like knowledge of scenario planning or the ability to closely manage cash flow in a crunch.

What Does This Mean For You?

The CFO is critical. How can you bring your company to the next level – or simply make it through economic difficulties intact – if your CFO jumps ship?

With financial software.

Ok, we’re not saying financial software can replace a CFO – at least not yet. However, the right financial software can certainly help smooth out the transition period to a new CFO by making life a heap easier for your finance team. It can also help you retain your current CFO, if that’s what you want to do.

Below, we’ll make a strong case for both.

How Modern Cash Management Software Mitigates the Impact of High CFO Turnover

Keep CFOs on Board

First, what’s actually driving the changing role of the CFO? The answer is technology.

Think big data analytics. Big data analytics is the process of analyzing and leveraging massive amounts of data – pretty much what it says on the tin. But without the right software and tools, this strategy will be impossible to execute effectively, and competitors who can execute it effectively will have a huge advantage over your company.

So, by helping CFOs meet changing expectations and drive the results the CEO and board of directors are looking for, technology has the potential not only to make the organization more successful, but also to put a dent in those high turnover rates. When they can meet those expectations without having to manually pore through mountains of data, CFOs will also be much, much less stressed out, resulting in greater job satisfaction.

And how do they do that? With automation. 

When data analysis is streamlined, and complex tasks are automated, technology not only empowers CFOs to fulfill their evolving role but also gives them more space to focus on the other things that are expected of them – strategic planning, business partnerships, and financial leadership, to name a few.

Two birds, one stone.

Make Life Easier With Automation

Automation is also one of the clearest ways software helps finance teams keep on chugging along, even without a CFO.

When bank data aggregation, cash flow forecasting, and account reconciliation are all automated, you won’t feel the impact of personnel changes so greatly. In an economic environment where many employees are leaving – not just CFOs – this can be worth its weight in gold.

With automation, finance teams can maintain a high level of visibility and control over cash positions and transactions. When all the data’s in front of them, they can make informed decisions swiftly.

As an added bonus, automation helps free up time for strategic activities. With routine tasks handled by software, they can devote more attention to analyzing data, identifying opportunities, and contributing to the organization’s long-term financial goals. This shift in focus from manual data processing to strategic initiatives enhances the overall efficiency and effectiveness of the finance team.

Fortify Treasury Processes With AI and Machine Learning

Normally, it’s down to the CFO to perform a thorough assessment of the company’s finances and devise plans of action from there. In the case of an absent CFO, AI can suggest strategies that would normally be recommended by them – and even many they would never think of.

Given the current economic uncertainty, the insights uncovered through scenario planning are a great example. Machine learning and artificial intelligence are incredible at spotting trends. Finance teams can enter user-defined variables – say a sudden decrease in sales of a specific product – which ML and AL can analyze and generate new scenarios from.

As Trovata’s machine learning algorithms grow to “understand” a company’s cash flows, the cash flow forecasts they help generate become more and more accurate over time. These increasingly accurate forecasts help guide decision-making. Paired with an understanding of the risks that come with market changes or specific investments, finance teams can make informed, strategic moves even without a CFO. 

We also have RPA – Robotic Process Automation. Think of RPA as a virtual team. By automating processes such as accounts payable, receivable, and financial reconciliations, finance teams can enhance efficiency and reduce errors.

See Trovata AI, the first generative AI for finance in action.

Help Interim CFOs Adjust Quickly

With high CFO turnover rates, we’re in the “age of the interim CFO.”

An interim CFO is going to have to get up-to-date quickly. Without software, this means digging through financial statements and historical data to try and understand where the company’s finances are at that moment. 

With a cash management software like Trovata, it’s as simple as looking at the single source of truth in a centralized data platform to view historical financial data and transaction records. They get an immediate view of liquidity and cash runway so, rather than having to start from scratch, that single source of truth helps maintain continuity 

With our new ChatGPT-like functionality, they’ll also be able to use the software much more quickly and intuitively, without having to go through that initial tutorial stage

Provide Direction to CFOs and Finance Teams

CFO and finance teams need to have a vision, and they also need to be able to articulate that vision. Software helps with both. First of all, by sorting through massive amounts of data at lightning speed, it can identify trends, patterns,  and potential areas for improvement. 

All these help CFOs and finance teams determine what their goals should be. When data is centrally located, as in API-based software like Trovata, it’s much easier to communicate this information and the resulting plans to the company at large. 

Get Around the Problem of Data Silos

Which spreadsheet is most current? This is the problem of data silos, and solving it usually depends on one or more people knowing the answer. Certainly, the interim CFO who was just hired isn’t going to know.

With software, though, no one actually needs to know which set of data is most current – there’s only one source of data, as everything is consolidated from bank accounts with APIs. 

Even in the absence of a CFO, software provides a centralized platform where finance teams can collaborate, communicate, and share financial information securely, regardless of their physical location. 

While a CFO may typically be regarded as the one who facilitates teamwork, the right software promotes effective teamwork even in the absence of a CFO.

Software Is Only Part of the Story… But It’s a Big Part!

At the end of the day, it’s still the people who make up your finance department. The right software, though, can make them much more effective and plug in gaps when required. By leveraging technology effectively, finance teams can maintain stability, continuity, and productivity, even in the face of record-high CFO turnover.

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