In this episode, Sidetrade’s Order-to-Cash Specialist, Darrin Brown discusses the top predictions in the order-to-cash space for 2023, where CFOs are placing bets on spend, and how inflation and the current market climate will affect next year’s finance transformation projects.
In this episode, Sidetrade’s Order-to-Cash Specialist, Darrin Brown discusses the top predictions in the order-to-cash space for 2023, where CFOs are placing bets on spend, and how inflation and the current market climate will affect next year’s finance transformation projects.
Welcome to Finance to Futurist, a Sidetrade podcast series on how innovation data and AI are disrupting order-to-cash. cash.
Natalie Silverman:Hi, this is Natalie Silverman for Sidetrade. Welcome to Finance to Futurist. On today's episode, we're discussing the top predictions in the order-to-cash space for 2023, where CFOs are placing bets on spend, and how inflation and the current market climate will affect next year's finance transformation projects. Please welcome Sidetrade's order-to-cash specialist Darrin Brown. Good morning, Darrin and thanks for sitting down for Finance to Futurist.
Darrin Brown:Thanks, Nat. Glad to be back.
Natalie Silverman:All right, well, welcome back. And for those listeners that may not have listened to your very first podcast, which was excellent, by the way, as always, maybe you could just give them a quick reminder of who you are and what you do at Sidetrade.
Darrin Brown:Yeah, I'm a regional sales executive here at Sidetrade. And I've been at Sidetrade for two years. But prior to that, I've been around the order-to-cash space in various roles, including running my own AR shop at a Fortune 500 company for several years. I won't say how long I've been around order-to-cash and AR my whole entire career and glad to share some of what I've got in this, this sticky old head of mine with you.
Natalie Silverman:Well, we appreciate that. And this is the episode that I love to do towards the end of the year. I call it the Nostradamus episode. If you had a crystal ball, what are some of the top predictions that you're seeing in the order-to-cash space? But I thought, you know, my first question for you is, you know, I just saw that a top analyst, they polled CFOs and asked them what the top three most difficult tasks over the next 12 months are. And I think the results are actually a bit surprising. Some things okay, yes, we know the global resignation is happening, we know that hiring and retaining staff is probably one of the highest challenges and difficult tasks that a CFO has to worry about. But some of the other numbers were surprising to me. 36% said forecasting, and then 35% of CFOs said cutting the right costs. So what I thought was missing, and a little bit further down the list, were things like working capital and cash planning. So I just thought, What do you think about that? And what do you think personally are the top challenges for CFOs as we close out the year.
Darrin Brown:Interesting to me Nat that those results came out like that. You know, of course, I think, as you mentioned, you know, the post-pandemic reaction to, you know, the great resignation that occurred, hiring and retaining good quality people is gotta be on the top of the list, especially if you see things change, and try to get in front of things you want to have. You want to be surrounded by good people to handle that as going forward. And the number two, the forecasting piece, I think you could wind that into a little bit of cash flow. I think it's there's a lot of uncertainty right now with the way that the economy's going globally, with, you know, inflation, especially, there's a little bit of uncertainty about what's next, what the next quarter holds, what the next employment results are, what the next move by federal governments are. So I think the forecasting piece makes sense to come in as second. But yeah, I think that working capital and cash flow has to be on my top three, just knowing what's coming, and potentially how important cash is going to be in the near future.
Natalie Silverman:All right, well, this segues really well into my next question. So as you mentioned, inflation, you know, we're still bothered by supply chain disruptions. As you said, there's a tight labor market going on, and CFOs tend to have to make trade offs in spend. So I guess my next question is, where do you think CFOs should place their bets in terms of spend for next year?
Darrin Brown:Oh, great question. You know, I think you have to go back to you know, those three things that we talked about on the last question. And number one, I think if I was a CFO, I'd be looking at employee retention and enrichment programs, how do we keep the good ones here. But a close second, if you can't tackle what you need to do with employment and headcount, data and technology become very, very, very important forecasting tools in AR tools are only as good as the amount of data behind them. So I think investing in the right data sets, and the right technology to look at those is going to be paramount coming forward. I think of it, you know, I compare it to my analogies is building a house. I can hire a really good carpenter and give him a hammer and a saw, but I bet he or she would be a lot more effective if they had some power tools. Right. So yeah, that's where I think I would I would invest.
Natalie Silverman:One question on the back of that is a lot of times CFOs are focusing maybe on one large transformation project at a time, right, which I that makes sense, right? You have a maybe you're switching your ERP or you've had a merger and acquisition and you're integrating multiple ERPs. So sometimes I feel like people like to do one thing at a time, which I understand, but what's your thoughts on that? And is that the most effective approach when it comes to looking at a transformation project?
Darrin Brown:Yeah, if you think about transformation, and I'll go back to my house building analogy, you don't often have to work with one piece at a time. Even if you are working one piece at a time, you know, building a frame or something like that, you need to be thinking ahead and need to be planning for what's the next phase and start lining up resources for that. So I know resources internally can be a little bit of a struggle during a transformation process. But you really have to look at what next domino needs to fall and start planning. Otherwise, you're going to find yourself, you know, running into lols in between transformation projects. And that can be more detrimental than doubling up and doing things concurrently. The other thing I'll say is, you know, especially with these projects, once the hoods open, I keep I keep using analogies, but once the hood's open on the on the car, you might as well tinker away right? So you know, if you've got your team working on pulling data or doing things like that, you know, sometimes while you're doing that, that's a good time to introduce other projects to a transformation, overall transformation.
Natalie Silverman:Sure, and I mean, we talk about being ERP agnostic, right, or some of the tools that are out there can be plugged in, right, while upgrades are happening at the same time. So like you said, sometimes it's actually more efficient. And if you're already going through a disruptive or change management type project, why not take a look at not just process, right, but tech and data and people all at the same time?
Darrin Brown:Yeah, because remember, I mean, for example, if you're doing an ERP upgrade, or a change, and looking at like an AR solution as a SaaS product to sit over the top, you know, if you're waiting for the ERP to get done, remember, you're going to be putting your team through a lot of changes, you train them on the ERP, when maybe you don't need to necessarily do that, you know, maybe your team can work out of a more intuitive AR SaaS solution tool. And you can get that up and running either concurrently or even right before an ERP change. And then your team's not disrupted at all.
Natalie Silverman:Now that's a great point. All right, Darrin, last question. As I mentioned at the top of the hour, we talked about if you had a crystal ball, what are your top predictions in the order to cash base for 2023?
Darrin Brown:I think is as companies start to go through 2023, they're going to see that inflation is going to be a bigger issue, the time cost of money is going to start to go up, maybe not even in small leaps, maybe in bigger leaps. And then then you may be also going to start to see the impact of an inflationary economy, world economy, on small businesses, and that starts to get where it's, you know, it starts to get a little scary from a credit manager standpoint, because you start to see small businesses start to struggle, and they're really the lifeblood of a lot of corporations out there. You start see your bad debt go up a little bit makes you real nervous about towards the middle or end of next year. You know what bad debt could look like potentially. I think we're still on a little bit of a downturn here. And it's just going to make cash flow so much more important.
Natalie Silverman:Thanks, Darrin, for your insights into the future of finance. For Sidetrade, this is Natalie Silverman.
Conclusion:This has been another episode of Finance to Futurist a Sidetrade podcast series. Make sure you catch every episode by subscribing to our podcast on Sidetrade.com or through your podcast platform of choice. Thanks so much for tuning in. This podcast is brought to you by Sidetrade, and is for general information purposes only. All rights reserved.