In 2023, CFOs must connect math to mood and facts to feelings: Kailash Varodia, RXIL

CFOs must display agility, resilience, curiosity, imagination, people-centricity and a transformative mindset as well as heart, says the veteran finance honcho.

Mannu Arora
  • Updated On Jan 9, 2023 at 09:03 AM IST
Read by: 100 Industry Professionals
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<p>RXIL CFO Kailash Varodia </p>
RXIL CFO Kailash Varodia
Kailash Varodia, CFO at fintech firm RXIL, which is an online electronic platform for the financing of trade receivables of MSME sellers against corporate buyers, discusses his thoughts on the role of the finance executives in the New Year. He says finance folks should increasingly see themselves as “Chief Fairness Officers”, stressing that it is important for them to ensure that their persona is characterised by empathy and that they have the fundamental understanding that the business is defined by its people, not profits.

“CFOs must connect math to mood and facts to feelings in 2023. They must display agility resilience, curiosity, imagination, people-centricity and a transformative mindset as well as heart. This will only help them become better business leaders,” Varodia, who has over 20 years of experience managing the financial segment, emphasises. Edited excerpts:

Q: How is the role of CFOs shaping in the New Year 2023?

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Kailash Varodia: CFOs are rapidly establishing new roles as forward-thinking strategists and advisors, providing guidance and insights into where the business is going rather than just where it has been. They help businesses see around corners rather than looking in the rearview mirror by using real-time analytics, predictive modelling, and smarter forecasting.

CFOs must be masters of data and technology in 2023. As robotic process automation (RPA), artificial intelligence (AI), and machine learning take root in finance departments and back offices around the world, CFOs are finding themselves in pivotal decision-making units as they try to determine which ones will grow and which are just expensive hype..

The CFOs must also continue to be strategic decision-making partners to the CEOs. In some ways, the adoption and implementation of new technologies have influenced yet another significant shift in the CFO role: that of strategic advisor and visionary partner to the CEO. As the custodian of company resources, they are best positioned to advise the CEO on what investments to make and which risks to avoid on the path to realising the CEO's executive aspirations for the organisation.

Q: What are the new responsibilities CFOs are likely to take up in 2023?

Kailash Varodia: The CFOs must get involved in other key areas, such as HR, operations, sales, and marketing. They should see themselves as Chief Facilitative Officers.

The CFOs must also foresee new technologies, identify emerging market shifts, and prepare for the wider economic or political outcomes that could affect their business. They should see themselves as Chief Future Officers.

Last but not the least, the finance folks must nurture employees and guide the organisations toward a more equal future. They should see themselves as Chief Fairness Officers. It is important that their persona is characterised by empathy and that they have the fundamental understanding that the business is defined by its people, not profits. CFOs must connect math to mood and facts to feelings in 2023..

They must display agility, resilience, curiosity, imagination, people-centricity, and a transformative mindset as well as heart. This will only help them become better business leaders.

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Q: How should CFOs infuse digitisation successfully in 2023?

Kailash Varodia: In the financial sector, digital transformation is no longer a technology upgrade, but rather a core business strategy. The reorganisation and reshaping of finance and accounting functions using technology to recreate efficient operating systems and processes without replacing traditional systems are referred to as digital transformation in finance.

CFOs can improve their digital strategy by answering three key questions. To begin, where will the most intriguing digital opportunities and threats emerge? Second, how quickly and to what extent will digital disruption occur? Third, what are the best responses to seize these opportunities and reallocate resources away from the most serious threats?

Finance leaders must align digital strategies and business outcomes. They should increasingly look at designing flexible planning and budgeting that can properly weigh the cost and value of digital initiatives in resource allocation decisions. Last, they should rethink how to measure the performance of digital investments, which may fall outside the scope of traditional capital budgeting methods

Q: How are you using digitisation? Can you share your experience?

Kailash Varodia: We are a firm that has been licensed by the RBI to handle Trade Receivables Discounting Systems (TReDS) for MSME Receivables financing. We provide a complete digital journey that begins with onboarding (platform registration), continues with transaction initiation, and concludes with transaction settlement.

As part of digital onboarding, RXIL also implemented C-KYC, Video KYC, and digital document signing. To manage infrastructure in a cost-effective manner, we have implemented a cloud-based solution.

Under the finance and account department, we have implemented seamless entry transfer from the Core TReDS system to the accounting system, auto-generation of bills, expense management system, online banking for payment processing, and recently implemented e-Invoicing feature. This not only helps to reduce processing time but also improves system operational efficiency.
  • Published On Jan 9, 2023 at 09:03 AM IST
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