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CFO Best Practices for 2024 and Beyond

September 12, 2023
joel wilhite

Industry bellwethers McKinsey, the Harvard Business Review and Fortune have all examined the evolution of the CFO role in recent years. Amid factors like the COVID-19 pandemic, a looming recession and the advent of artificial intelligence (AI), it’s no surprise that financial leaders are taking on new responsibilities and functions.   

AvidXchange CFO Joel Wilhite has held financial leadership roles for decades, driving strategic financial planning and operational accounting within high-growth companies. In this piece, we’ll share his top pieces of advice for fellow CFOs as they navigate the evolving corporate landscape.  

Adapting to New Technology

Wilhite encourages CFOs to step outside their comfort zone when it comes to new technology. “The applications, tools and solutions that are available today are so much better than what we’ve been using for the past 20-30 years. Your teams are probably already smarter than you about the technology that’s out there today. Engage them and empower them to find better ways to perform these essential functions,” he said.  

Wilhite says CFOs of technology companies should “buckle up” as they head into the future. He said, “To be successful, you’re going to have to embrace change and uncertainty. It’s just a constant reality, and so you must be comfortable in that environment. It goes back to being comfortable with ambiguity. You should have a team that consists of lots of creative, analytical problem solvers, not just accountants.” 

Keeping tabs on trends and new tools for your back office should be a CFO priority, according to Wilhite. “A CFO in any organization needs to understand the way their back office is being disrupted. Accounts payable (AP), accounts receivable (AR), billing, expense reporting — all those back-office processes and systems are in the process of being disrupted. I’m not telling a CFO anything they don’t know, but the way your business runs is being transformed.” 

Wilhite and his team at AvidXchange use the company’s own products to automate accounts payable, which has freed up time for the whole department. “I fell in love with the AvidXchange business model because I realized what we’re doing is solving a problem that I’ve had for the past 20 years, and that’s sitting down every week and working my way through a giant pile of checks and invoice voucher packets and signing each one. Since coming to AvidXchange, I haven’t signed a single check. I don’t spend two hours every Friday going through a stack of invoices, and I don’t have an AP department that’s buried in paper. I’m not struggling to understand whose signature is what on a paper invoice,” he shared.  

“The AP automation solution that we put in the hands of the mid-market is fantastic for me and the controllership function. Without it, I would be pushing paper all over the place.”

Budgeting for the Long Term

Wilhite believes there are three core elements for successful budgeting:

Wilhite says creating common financial literacy among an organization is “fundamental.” He believes all employees should understand the business’ financial model and how it makes money from the products and/or services it delivers.

He says having teams on the same planning cadence is also important. Wilhite suggests implementing a system so teams are clear about how to spend their time throughout the year. He likes to focus on planning during the third quarter. “There’s no point in budgeting unless you have a plan. What I’ve typically done is organize a planning process that takes the better part of the third quarter to take a look at what we say our plan is and what our strategy is,” he said.

Wilhite then develops long-term financial projections, oftentimes up to five years out. He believes this allows his team to solidify plans by creating productive discussions. “We use that to start a conversation and test what our plan is by asking questions – What is our strategy? What do we think about that? What’s the market doing these days? How is that different from last year or even quarter?” he said. “You develop a series of assumptions that ultimately result in agreement around a plan. And then the first year of that projection is the next year, which becomes the starting point for a budget.”

Partnering Across Departments

Wilhite considers organizational visibility important, but says accountability needs to play a part as well. “One thing to consider is at what level in the organization should you hold accountability – figuring out the right level to provide real visibility, ownership and control. How far down is appropriate? Once you work that out, I think then it comes down to utilizing tools, routines and behaviors to provide that visibility,” he shared.

A high-performing executive team is crucial for helping individual departments create successful budgets, according to Wilhite. He said, “During that Q3 planning phase, we’re not talking about budgeting or who owns what as much as what we want to see the company do. It’s essential that the executive team informs and participates in the planning process, so when we get to budgeting in Q4, there’s agreement on where we’re going as a company.”

Wilhite also emphasizes a strong business-finance partnership. “We are building a team of finance partners who act as analysts and advisors, supporting business leaders by partnering with the individuals who are doing the budgeting for those respective functional areas. These partners help business owners stay on track with the budgeting process and deliver numbers that line up with projections,” he said.

Tapping into New Skillsets

Wilhite agrees that the CFO role is changing, requiring financial leaders to develop new skills. He said, “What made the successful CFO in the past was primarily stewardship and controllership. In the old model, the CFO was a protector of company assets, a bit of a cop and a scorekeeper, with black-and-white accountant skills. That’s changed over time, and certainly I’ve seen it over the last 15 years or so, with the CFO becoming more of a trusted business advisor.” 

Wilhite says he views his current role as involving three dimensions: 

Wilhite shared that he’s had to adapt and learn new skills throughout his career. “As someone who started their career in traditional accounting, compliance and auditing, which has been the classic career progression path for the traditional CFO, I recognized very early that the game-changing, innovative CFOs are those that spend less time and energy policing assets and more time being forward-thinking, creative, analytical problem solvers,” he said. 

“The demand for data-driven decision making has grown tremendously in a world where we have exponentially increased the amount of data available to us to make decisions,” Wilhite said. “A highly developed data analysis skill set is required, combined with the critical thinking and communication skills to turn the data into well-articulated and actionable choices.” 

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