November 8, 2024

Advancing Business Journey

Empowering Business Excellence

Modern finance team makeovers: Chief accounting officers

Modern finance team makeovers: Chief accounting officers

Editor’s note: This is the second in a series of stories by CFO Dive that is examining how technology and fast-changing expectations are reshaping critical roles in the finance function. The first article on the modern finance teams CFOs are building looked at the evolving roles that controllers play.

In the face of new ways of working and technologies, finance professionals like the chief accounting officer are seeing their historic roles morph to fit the needs of a modern business. The CAO is one of the highest-ranked members of the finance team, often second only to the CFO.

Like the controller, the CAO acts as a trusted partner and advisor for the finance chief, but when it comes to differentiating between the CAO and the controller, “the aperture is just a little bit bigger, when I think about it at the CAO level,” said Lauren Hotz, CAO of software provider Intuit.

Widening the aperture

Hotz has logged a nearly two-decade career at the Mountain View, California-based technology provider, which offers products including QuickBooks, TurboTax and Mailchimp. She has held numerous roles throughout her time at the company, including as its VP of finance and corporate controller, and has served as its CAO since February 2022, according to her LinkedIn profile.

Processes such as the quarterly close or how accounting policies are implemented across an organization often fall into a controller’s purview, for example, while as a CAO, Hotz takes responsibility for “areas around financial systems and governance,” she said. Hotz spends much of her time focused on compliance, working closely with Intuit’s chief audit executive regarding compliance surrounding the Sarbanes-Oxley Act as well as overall governance, she said.

“I spend time in other types of compliance, looking at things that we produce externally, like scripts, press releases…ESG, all the new climate rules, cybersecurity,” Hotz said by way of example. “There’s just a little bit of an open aperture when it comes to those functions, and that’s really where I find myself and my peers in [the] industry tend to focus.”

That range of responsibilities means that the CAO has a critical role to play in the finance function, reflected in their compensation. On average, CAOs in the U.S. receive annual salaries of $238,200, according to data from Salary.com. Annual salaries can range between $238,200 to $334,100. 

CAOs act as key partners for finance chiefs in a world where CFOs need to juggle a growing amount of information, quickly. Today, a CFO is expected “to become a data expert, and a process expert and a systems expert,” said Patrick Villanova, chief accounting officer of Los Angeles, California-based AP automation software provider Blackline.

That expectation is then filtered down to the rest of the finance function, with many of the responsibilities historically taken by the CFO now given over to the CAO — the two roles have a “symbiotic relationship,” Villanova said in an interview.

CAOs can step in on some of the processes overseen by controllers — such as account reconciliation — but they are also expected to support the CFO in strategic decisions. A close working relationship between the two is especially critical as finance chiefs need to juggle an ever-increasing volume of data to do their jobs, Villanova said.

“So what has happened is a proliferation of data, and every company is just generating tons and tons of data because we have the computing power to do it,” he said. “And the issue with it is deciphering that data, ingesting that data, and changing that data into information and insights. Therein lies the challenge that a lot of CFOs face.”

CAOs — who are already experts in processes — are taking on the burden of ensuring information is accurately relayed to the CFO.

The CAO also needs to work closely with their CFO to ensure the business’ finance and accounting functions are moving smoothly; for Hotz, the CFOs she has worked with as CAO at Intuit — there have been two since she took the seat — have been more FP&A focused than accounting-focused finance chiefs, and “because of that there always is much more of a focus on strategy and operations and the segment finance functions,” she said.

“I think key to the role between a CFO and a CAO is excellent communication, understanding what’s important for them to know, and what’s not important for them to know,” Hotz said. As a CAO, Hotz also has a fiduciary responsibility that goes beyond who she reports to and “discharging that effectively is part of what I hold myself accountable to,” she said.

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