Chief financial officers (CFOs) are responsible for a massive part of an organization’s success. Managing revenue and finances and creating strategies for growth are vital for keeping a company afloat and thriving. However, the financial and business landscapes have been hit with many challenges and changes, from inflation to the artificial intelligence boom. Forbes notes that transformations and disruptions are becoming increasingly common, especially with the massive advancement in technology and software. CFOs not only need to have financial know-how but also must be informed in tech and other sectors to manage finances and grow revenue effectively.
In today’s competitive landscape, driving revenue growth is a top priority for many companies. CFOs play a crucial role in achieving this goal, not just by managing finances but by becoming strategic partners in the growth process. Here are some key tips for CFOs to manage finances in a way that fosters revenue growth:
Streamlining repetitive processes with digital transformation
Revenue management can involve many repetitive processes and menial tasks that can take up time and effort that could have been used to drive growth. Manual processes and disorganized systems can also lead to errors and inaccuracies, which can put revenue and reputation in jeopardy. CFOs and finance teams can spend their valuable time focusing on revenue-generating tasks with digital transformation and automation, and it’s essential to bring in the right tech to keep operations smooth.
Softrax’s subscription billing system showcases how tech and automation can capture all revenue stages for simple or complex subscription models. CFOs and finance teams can often get bogged down by revenue recognition since they must adhere to ASC 606 and IFRS 15 standards. This tech eases reporting for ASC 606 and IFRS 15 while supporting complex billing on the same platform. CFOs can also easily keep track of contracts and deploy efficient contract renewal with the platform. Automation can help add agility and streamline processes, allowing CFOs to focus efforts on growing revenue instead of just managing it.
Data transparency
Leveraging data and analytics can help CFOs identify development opportunities, measure performance, and track progress toward goals to ensure efficient revenue management and growth. However, transparency in data is also crucial, as it allows for easy data availability and accessibility for finance teams. A Horváth CFO study found that only 20% of global CFOs say their organizations are data-driven. A lack of data quality and data infrastructure, as well as a prevailing silo mentality—an unwillingness to share information—among CFOs, prevents cross-divisional collaboration, which is key for making large amounts of data usable.
With data transparency, CFOs make more informed decisions on budgeting and forecasting, allowing them to strategize for revenue growth and avoid roadblocks that can hamper it. Finance teams can also be let into the loop, and everyone can get the necessary information to improve finance operations and offer suggestions on how to grow revenue for the company. In high-growth organizations like Schellman, which offers IT and security compliance technology and services, many initiatives go on at any given time. Schellman CFO Andy Goldstein notes that high growth and data transparency are inseparable; better data and data transparency ensure that efforts are harnessed to get everything done promptly, making growth possible.
Adapting to consumer needs and demands
CFOs need to have their finger on the pulse regarding new and emerging needs and demands to create revenue strategies that are profitable and provide satisfaction to clients. For instance, billing models like usage-based billing are becoming more popular with consumers. Business Insider highlights that since they’re only billed for what they use, it provides a more cost-effective solution as opposed to paying a fixed amount regularly. While it may seem unprofitable at first glance, exploring this billing model can benefit organizations looking to attract new customers. Hybrid pricing models, combining the predictability of subscription billing with the flexibility of usage billing, may become a standard across industries. CFOs need to prepare for such a change to grow revenue.
CFOs need to find a balance between revenue growth and understanding the mindset and situation of their consumer base to find a strategy or model that can suit everyone’s needs. Following this approach may seem challenging, considering CFOs must also focus on the business’s finances. However, keeping consumers in mind is how platforms like PayPal rose to success. CEO Dan Schulman noticed the inaccessibility of financial services for millions and sought to democratize the financial system. As such, PayPal reimagined how people move and manage money and how merchants and consumers interact and transact. CFOs can grow revenue by paying attention to consumer needs, behaviors, and demands, which can inform strategies and decisions for managing finances.
