As a B2B Software-as-as-Service (SaaS) organization, 6sense is a digital-first company with an emphasis on Big Data and automation capabilities. They’re concepts that naturally extend in the back office and into 6sense’s own workflows, particularly when it comes to finances.
But digitization is an ever-evolving goal, and one that for many organizations — 6sense included — changed as a result of the pandemic.
Speaking with PYMNTS for this week’s Voice of the CFO report, 6sense Chief Financial Officer Rob Goldenberg said there were many impacts from the coronavirus crisis on the company’s back-office financial processes. Some, he said, were anticipated, while others caught the company off guard.
Goldenberg discussed some of the biggest challenges, pain points and opportunities his firm has seen amid the pandemic and explored how CFOs within businesses of all sizes and industries can be strategic about the technologies they choose to implement to mitigate pandemic-related volatility and future-proof for a post-pandemic market.
AR And AP: Butting Heads
One of the biggest and least expected challenges stemming from work-from-home requirements pertains to collections. Many of 6sense’s corporate customers continue to pay the company via paper check, and then send those payments to the firm’s corporate headquarters where there are no longer any employees.
It added an extra layer of complexity to collections, he said, because the accounts receivable (AR) department cannot always have visibility into those incoming payments.
“Now we have to be concerned about whether that customer is late in payment because there’s a check sitting in the office and we haven’t sent someone to find it yet, or whether they are actually late in payment,” he said.
The pandemic has certainly accelerated digitization efforts and migration to electronic B2B payment methods, but interestingly, Goldenberg said he’s observed more of 6sense’s clients not necessarily embracing ACH transactions over checks. Instead, they’re adopting FinTech solutions like Bill.com and Ariba that can mitigate the challenge of making check payments in a remote work environment by cutting physical checks on behalf of that company.
It’s not the only way that companies’ AR and their clients’ accounts payable (AP) workflows have ended up butting heads in today’s market.
Goldenberg said that, at the onset of the pandemic, 6sense’s investors recommended that the company strengthen its cash flow by stretching out payment terms as long as possible while accelerating collections.
“But it seemed like every B2B company in the world got that exact same direction,” he said. “So, we’re all out there at the same time trying to pay slower and collect faster. What ended up happening is we all did a lot of work and ended up in the same place we were at pre-pandemic.”
FinTech Adoption: Challenges And Opportunities
A climate in which AP and AR needs often butt heads — even with adoption of AP and AR technology — is an example of the limitations of FinTech platforms and digitization efforts.
Indeed, Goldenberg agreed that it’s important for finance teams to be strategic about the tools they choose to implement.
“You don’t just digitize or modernize for the sake of doing it,” he said. “There need to be specific outcomes from that process that you’re targeting.”
One area in which Goldenberg is looking to modernize back-office workflows is in the process of the financial close. Traditionally, it’s a process that involves a lot of in-person collaboration. Today, of course, this process must now be accomplished via remote working and digital communication tools.
About one-fifth of Goldenberg’s team is based in India, which has presented another major challenge for the company as those professionals are now at home in remote villages with spotty and unreliable WiFi.
While these challenges have made the closing process much slower, Goldenberg said the company is now exploring various technology providers to automate this workflow — a goal he said will not only ease some of the friction his team sees today, but will help to further drive the modernization of the company in the future, even after the coronavirus crisis has waned.
The CFO As The Financial ‘True North’
Like many organizations, Goldenberg said 6sense has encountered challenges that cannot necessarily be solved through technology. For instance, professionals who are also parents working from home with their children face a unique struggle.
But when it comes to processes like AR, the financial close and reporting, FinTech adoption can be essential, if technologies are strategically chosen. One of the biggest risks of an un-optimized digitization strategy is platform overload, which Goldenberg said threatens to convolute the financial picture for the organization.
Having multiple platforms across the enterprise could mean portals that present varying and sometimes conflicting information about revenues or cash positions, for instance.
As such, he said, it’s up to the CFO in any organization to act as a leader and choose technologies that can present a single source of financial truth for the enterprise at large.
“Absolutely, CFOs can be leaders — and if you dig down one more layer, it goes even beyond that,” he said. “Regardless of size or even industry of an organization, CFOs have to be leaders of that change. At least with the numbers, the finance and accounting organization should be the true north.”