The rise of digital-native CFOs will revolutionize AR

The makeup of the modern C-suite is undergoing a significant transformation. As the oldest millennials ascend into key organizational leadership positions, they are initiating indelible changes that are far removed from how their predecessors did business for decades. 

The office of the CFO, in particular, is experiencing a refresh, with the average age of this role getting younger. In fact, according to research conducted by the global consulting firm Korn Ferry, the average age for CFOs at the top 1,000 U.S. companies by revenue is now 54, which ties for the youngest role in the C-suite. 

With the oldest millennials approaching 40, it won't be long before they are the dominant generation among active CFOs. Nor will it be long before these digital natives revolutionize traditional CFO responsibilities, with perhaps the biggest changes they initiate coming to accounts receivable. 

Ringing in a new era for AR

We can already see the impact that current millennial finance professionals are having on the accounts receivable space. As this group continues to climb the corporate ladder with their sights set firmly on a future role as CFO, they are already making their presence felt.

In fact, a recent study uncovered that more than 60% of millennials in the workforce are already in management positions, giving them direct influence on and responsibility over their companies' operations and organizational processes. With that in mind, it's reasonable to correlate many of the drastic changes occurring in AR directly with this young cohort. 

We can use B2B payments' digital transformation as an example, and in particular the decline of the paper check. According to new data from the Association of Finance Professionals, just 33% of B2B payments are now made by paper check, down nine points from its most recent survey in 2019. Of course, many factors have contributed to this, like postage increases and the very real, tangible costs associated with sending a check today. But it's important to note the influence of this new generation of B2B decision-makers, including AR professionals, who have brought with them to their role an expectation for quick and seamless digital payment experiences. 

In turn, this has contributed to a fintech boom where new advancements in AR technology are enabling suppliers to automate once highly manual processes like invoicing, cash application, and collections. As a result, they are speeding up cash flow, reducing days sales outstanding , and ultimately, improving the financial health of their entire organization. 

Not your parent's CFO

Indeed, this new generation of AR professionals and decision-makers is already pushing the industry forward. As they ascend into even more authoritative leadership positions, including the office of CFO, it's clear we'll see even more transformative change for the entire industry. 

In fact, despite the space's significant digital transformation in recent years, it has failed to completely satisfy this demographic. According to a new Billtrust survey of over 500 financial professionals, including both current CFOs and those on track to take the position, only a third of emerging CFOs said that they think their enterprises' infrastructure is "very modernized," meaning the majority of processes and systems are automated, integrated and digital. In comparison, nearly half (46%) of current CFOs believed the same.

Meanwhile, the study also uncovered several evolving traits of the future CFO, all of which will undoubtedly contribute to the acceleration of next-generation AR technology, as well as greater digital adoption across the finance team. Unsurprisingly, they are much more fluent and literate in technology than their older counterparts. Some 61% cite "digitizing invoices" as an example of progress toward modernized digital infrastructure versus just 38% of current CFOs. In addition, 70% believe that data and analytics are paramount to the future CFO role adding value to the enterprise, and define "digital success" via technology projects that extend or integrate infrastructure with customers, vendors or partners.

Perhaps most interesting is their commitment to the customer. Yet nearly half (47%) of tomorrow's CFOs chose "customer satisfaction" as an initiative they plan to address when they ascend into their role, trailing only behind "financial reporting/forecasting." This is interesting because even though this traditionally isn't a CFO responsibility, they have always had the power to dramatically influence customer relationships through the AR processes they put in place at their organization. After all, the vast majority of today's B2B buyers are millennials too, and they have their own expectations for fast and convenient payment experiences. A supplier's ability to offer this to their customer can have a huge impact on customer satisfaction and customer retention, something that the next generation of CFOs have promised to prioritize. 

Changing DNA of future financial leaders

A new generation of financial leaders are rethinking the roles that CFOs play in the enterprise. As these digital-savvy professionals take on the office of CFO, they will undoubtedly be facing challenges that look markedly different from the ones their predecessors faced. Comfort with technology — and their drive to expand their organizations' digital goals — is already putting them in a prime position to meet whatever challenges come their way. 

Of course, one of these challenges will be optimizing cash flow in both flourishing markets and turbulent economic landscapes. They have, however, illustrated their ability to keep pace with the new dynamics impacting organizations — and even be the driving force behind these changing dynamics. As we say goodbye to "traditional" CFO models, we can also get ready to permanently wave off many of the outdated processes that have plagued AR teams for years into the sunset.