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Interview: AvidXchange CFO Joel Wilhite on Budgeting Best Practices

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Interview: AvidXchange CFO Joel Wilhite on Budgeting Best PracticesAvidXchange Chief Financial Officer Joel Wilhite is a seasoned financial executive with over 20 years of experience in progressive growth companies.

Before coming to AvidXchange seven months ago, Joel was the CFO at Quantros, a software-as-a-service (SaaS) company in Greenville, S.C., which offers an enterprise-wide suite of applications that helps hospitals better manage the quality and safety of patient care.

Prior to Quantros, Joel was the Senior Vice President of Finance for BenefitFocus, a leading SaaS provider of benefits administration software and solutions, and the CFO for the International division of Blackbaud.

We sat down with Joel to discuss his role as CFO, how that role is changing in today’s rapidly changing technological landscape, budgeting best practices, and how accounts payable automation has impacted his job.

To begin, I’d like for you to tell me, in your own words, what you do here at AvidXchange.

Joel: [laughs] That’s a good question! If you were to ask, “What have you been up to for the past six months?” I’d say raising capital and building a finance team. I’ve been focused on raising $300 million in growth capital, which we just completed with our MasterCard partnership

As for the question, “What is my job?” I think about that across three dimensions. Number one, to support and drive growth. I’m our CEO’s right hand in affording good decisions for creative problem-solving, so we can continue to fuel and support the company’s growth. Number two is embedding and developing financial muscle. What I mean by that is building teams. Not just the finance team, but creating a kind of financial literacy across the company, throughout the business. That includes how we design the organization, who we hire, how we train, and how we speak about the business. That’s a huge part of my job.

Number three would be stewardship — being responsible for the shareholder’s interests, preserving and maximizing return on assets and capital, and protecting the company from a compliance standpoint. I help make sure that we make good, data-driven and return-driven decisions.

How does that job description differ from previous SVP/CFO roles you’ve held?

Joel: I’ve spent the past 20+ years managing in high-growth technology. Those three dimensions I just outlined would be true in a couple of the technology companies that I’ve helped take from an AvidXchange-sized startup to a public company, companies 5x the size we are today. But I have also had roles where transition, change, or turnaround was job one. And in that case, growth would not necessarily be the primary dimension of my role.

I ask because there’s been a lot of talk around how the CFO role is changing. I recently spoke with thought leader JP Nicols about how technology is reshaping the role to include not only the effective allocation of financial resources but non-financial assets as well, with an increased focus on innovation and creating new value streams for the company. Do you find that to be true?

Joel: Yes, absolutely. The role is changing. What made the successful CFO in the past was primarily stewardship and controllership. That was the prime objective for CFOs for as far back as you can go. 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.

By virtue of where I’ve landed in my career, I’ve participated in that change for the past 15+ years. This change has been very pronounced in the technology arena, and I’ve been in senior finance and CFO roles at technology companies almost my entire 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.

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. 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.

Switching gears, when it comes to budgeting, do you have any advice or best practices you could share with other CFOs?

Interview: AvidXchange CFO Joel Wilhite on Budgeting Best PracticesJoel: When it comes to budgeting best practices, there are a few things that for me that have stood the test of time over the years.  First of all, setting common understanding and definitions around our financial model; how that links to how we make money. How do we turn our products and services into money? There has to be a common financial literacy. That’s fundamental.

I also think it’s important to have clarity about what your planning cadence or cycle looks like. One thing I’m working on at AvidXchange is implementing a model that’s been successful for me at other companies, in so far as being clear about how we as an organization spend our time throughout the year. I think of the third quarter as more of a strategic planning process. 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.

From there we develop some financial projections over the course of a long period — three years out, five years out — and 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? You develop a series of assumptions that ultimately result in agreement around a plan. And then the first year of that three to five-year projection is the next year, which becomes the starting point for a budget. So as you enter Q4, now you’re budgeting, but you’re not budgeting without an end in mind. You have an idea of where you’re going.

How do you create visibility across an entire organization?

Joel: 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.

Are there any specific tools or solutions you use to help with budgeting? Are there any must-have technologies that CFOs should be budgeting for next year?

Joel: We’re currently implementing the Adaptive Insights Suite, a cloud-based corporate performance management software (also known as enterprise performance management or EPM software) that delivers incredibly intuitive budgeting, planning, forecasting, reporting, and dashboards. This will be the third company that I’ve brought this tool into and what it does is it affords the ability to push visibility of financial planning, projections, and results into the hands of those who hold ownership and control.

How do you help individual departments be successful in the budgeting process – i.e., getting them to adhere to deadlines and have their actuals line up with initial projections?

Joel: It starts with a well-performing executive team. So much depends on you know, a high-performing executive team. 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.

Another element is a business-finance partnership. We are building a team of business 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.

Is there anything different about the CFO role, whether it’s the budgeting process or reporting, as a result of working with AvidXchange’s automation solution? What’s it like being a CFO in an automated environment?

Joel: 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 six months ago, 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. The AP automation solution that we put in the hands of the midmarket is fantastic for me and the controllership function. Without it, I would be pushing paper all over the place.

Do you have any advice for how CFOs can be proactive about the rapidly changing technological landscape?

Joel: My first bit of advice is if you’re a CFO of a technology company — if the way you make your money is via building, deploying, and servicing anything around technology — then buckle up. 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.

Also, a CFO in any organization needs to understand the way their back office is being disrupted. Accounts payable, accounts receivable, 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 even if you don’t make money by deploying technology, the way your business runs is being transformed.

You have to step outside of your comfort zone. 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.

Want to learn more best practices for year-end closing? Check out our latest eBook, The End-Of-Year Survival Guide. This informative guide includes tips and tricks from industry thought leaders, the AvidXchange accounts payable team, and customers. Download your free copy here!
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