The Intersection of Finance and Technology: Staying Agile and Modernizing Your Finance Operations

Welcome back to CFO Weekly, where we're talking with financial leaders about how to build efficiency in their teams, create time for strategy, and ultimately get results. With your host, Megan Meese. Let's jump right in.

Megan - 00:00:31: Today. My guest is Joe Chevalier. Joe is a finance-oriented CPA focused on bridging the gap between operations and financial results and serving as a strategic partner to the CEO. Joe is also a self-taught, full-stack developer with experience developing and deploying in-house analytics and back-end tooling. Joe, thank you very much for joining me on today's episode of CFO Weekly.

Joe - 00:00:56: Thank you for having me.

Megan - 00:00:58: Yeah, today our topic is two-part digital transformation and weaving finance into the business's operating fabric, both crucially important to modernize finance and accounting. So I'm looking forward to this conversation, and we have a lot to cover, so let's get started.

Joe - 00:01:15: Okay.

Megan - 00:01:16 First, and as always, let's start with you and your story as to how it is that you ended up where you are today.

Joe - 00:01:22: Yeah, so I think I'll have to go way back for this because it does kind of color where I ended up. So I joined the Marine Corps out of high school, and I was an amateur Marine for about six years. I got out of the Marine Corps and I used my GI Bill to get my accounting degree, worked in public accounting for a few years, got my CPA, and then had the opportunity to kind of move into the private side as a controller. And then I stepped into a hospital CFO role for a private equity-backed behavioral health company. So I spent about ten years in healthcare, and I got the opportunity to jump to tech back in 2020. And if anybody remembers what was going on in 2020, healthcare was not a fun place to be 2020. I took that and the tech was way more fun in 2020. So I made that jump, and that's how I ended up where I am now, at APS.

Megan - 00:02:24: And how did you make that jump? It can't be an easy jump from healthcare to technology.

Joe - 00:02:31: Yeah, I would honestly say that healthcare is probably way more difficult. Tech is relatively easy. If you're just looking at the accounting perspective, healthcare is way more complicated. So it wasn't that the accounting was harder, the finance was harder. It was mainly learning new concepts and being part of a really high-growth business and learning to move fast and adapt.

Megan - 00:02:57: So as you look back on your career, are there stories that stand out in your mind as turning points?

Joe - 00:03:06: Yeah, when I took the job as the hospital CFO, I had been an accountant for, I think, four years. At that point, I was a little bit older because I'd spent some time in the Marine Corps, but the CEO at the hospital really took a wild chance on me. To this day, I have no idea why she did and I went from maybe having three direct reports to having a team of 20 people that I was responsible for. And I really had to pivot hard on my accounting skill set, because up until that point, my career had been very accounting-focused and really start to understand what finance is and be more forward-looking. And that was hard, especially pivoting, to actually having to manage people, which I hadn't had to do a whole lot of up in that point in my career. So that was a big turning point. And I think coming into APS and really my role growing from being more finance and accounting oriented to having a huge operational component to it has also been a big transition and kind of turning point.

Megan - 00:04:24: So talk to us about APS payroll. What is it that you do?

Joe - 00:04:30: Yeah. So APS is a SaaS HCM platform. So for somebody that wants to process their payroll and pay their employees, we do that, and then we handle the HR side. So if you wanted to manage their benefits, open enrollment, and general HR stuff like hiring and onboarding, we have a platform that does that. And then we also handle time attendance so employees can be able to clock in and out and make PTO requests and scheduling. It's a full-cycle SaaS HDM platform. So I always tell people that payroll is like the oldest fintech there is. People have been using software to process payroll since like, the 70s, so we're really the original fintech, right?

Megan - 00:05:21: And who is the ideal client?

Joe - 00:05:25: So we focus kind of on SMB space. There are some bigger companies that provide enterprise-grade solutions. We try not to compete with those. But usually, our ideal client is somebody that has maybe 50 to 250 employees. As an HR department of one is what we really focus on is really enabling a business that doesn't have enough staff in HR to maximize the resources that they do. And usually in those companies that have 100 employees, you have one HFR person, they've got a bunch of stuff to wrangle, and they really just need some help. And our software provides that.

Megan - 00:06:05: And lastly, just talk to us about your role there. What is it you do and oversee? What are your responsibilities?

Joe - 00:06:13: Yeah, so I'm the VP of Finance and Operations, and I report directly to our president and CEO that was originally brought on with kind of my private equity background to professionalize the organization a bit, just from an accounting and finance perspective. And as things caught fire in the organization, I stepped in and fixed them, and then they were mine, and eventually ended up with a pretty big piece of the organization reporting to me.

Megan - 00:06:46: So the role of finance and operations being together, that's something that's probably evolved in the last ten years. Actually, let's switch gears here for a minute. So let's talk about digital transformation in general, the finance skill set. So data analytics and automation, are both huge things these days. So how do you see the role of finance professionals evolving as things become more automated? One and the world or the Importance of analytics explodes in part two.

Joe - 00:07:33: Yeah, okay, so I'll start at what may be the bare minimum new skill set is, and what I think that is being able to really speak in technical terms. For example, a finance professional should know what an API is and how it works, understand what SQL is and how a database is structured, and maybe know what SFTP means and how it can be used to transfer data. A lot of these concepts are probably already familiar to finance people. If you use Excel, you're basically using a functional programming language built on top of a database. So I think finance people are really well positioned to understand these concepts. They just have to be willing to make that leap and really dive into it. And then on the more skilled end, I think that finance professionals should be able to write basic scripts and things like Python, R, DAX, and SQL. And I think being able to do these things gives you kind of like a superpower to really automate the most boring parts of your job that don't add value. And that's what I've done a lot of at APS.

Megan - 00:08:46: Yeah, I think a lot of people are afraid of automation, a lot of accountants that, hey, this is going to take my job. What would you say to those that are scared of the thought of automating?

Joe - 00:09:00: Yeah, I would say it's going to take the worst parts of your job and you shouldn't be afraid of that. You should embrace it. And really, as an accountant or finance professional, those things being automated and being able to get rid of those things actually lets you add more value to the business and makes you more valuable.

Megan - 00:09:19: So if you don't have these skills, where would you suggest starting?

Joe - 00:09:24: So, I taught myself the first programming language I taught myself was Python, and there's a really great book called Automate The Boring Stuff. So I would suggest giving that a look. But really the great thing about programming and data analytics and data warehousing, all this stuff is that so much of it is open source and it's out there for free. And it's literally a Google search away and just a little bit of gumption and effort to learn it. You don't have to pay a single cent to learn how to program or learn how to write SQL queries or learn how to send up a data warehouse. It's out there, it's free, it's available. You just have to try.

Megan - 00:10:09: So what steps have you taken to upskill your own finance department?

Joe - 00:10:15: I would say that if you want your team to upskill, you got to start with yourself. So that's where I started. I wanted to be the most technically competent person in the accounting and finance team at this stuff. And as I learned things. I kind of will take them and simplify them down and package them up and then pass them out for consumption to the team. Sometimes this is done by maybe they have a certain set of data they need to get every month. Maybe I write a SQL query for them and then teach them how to run that SQL query against the database. I will tell you that you can't upskill your people by hiring consultants. It's a talent that you really have to develop in-house. You have to understand those concepts if you want your people to understand them.

Megan - 00:11:04: And how do you ensure that the finance team remains agile and adaptable to changing technology and data requirements? It seems explosive at this point, how much technology is changing on a daily basis?

Joe - 00:11:19: Yeah, it can be scary how fast things change. I would say that new technology is almost always built on old technology. And if you have a grasp of those basic concepts that I talked about like what an API is and what SQL is and how all these things tie together and work, new technology shouldn't scare you because it's just built on top of those concepts and it's really easy to understand it if you grasp those basic things.

Megan - 00:11:48: I'm not sure if you can answer this, but how do you think Chat GPT is going to change the accounting profession, if at all?

Joe - 00:11:57: I would say that it's a very interesting tool. I would say that there is a lot of potentially very boring work that can be automated, especially around like let's say you want an ASC 606 recognition memo. That's something that GPT is going to excel at, just like it would excel at writing a legal opinion. So I think there's a lot around policy and procedure, like generation of policy.

Megan - 00:12:30: And the procedure, generation of this kind of very esoteric accounting opinions and stuff like that, that it could really streamline.

And let's switch gears and talk about making finance part of the business's operating fabric. It seems so important these days, as finance and accounting evolve, that we get out of our own offices and we're less siloed than we used to be. So what steps have you taken to integrate the finance function into the broader business strategy?

Joe - 00:13:11: So as a CFO, your entry point into the business operations is the budgeting process that's really your first contact with it? I would say that first before you can integrate into the broader business function, you have to understand those functions. A lot of finance professionals get really esoteric about what their job is. And I think that we should really be more focused on the nuts and bolts of how the business works because that's what really creates the financials and generates cash flow. But going back to the budgeting process. That's your first contact with the broader business strategy. And what I like to do is incorporate a broader overarching planning strategy as a part of the budgeting process. What I have managers at APS do is the first thing when we're doing the budget is they complete a planning narrative where they talk about what is the purpose of your team. How are you doing on the different aspects of your team, people, process, and systems? What is your critical number? How do you know you had a good week? And then talking about how they contribute to the EBITDA target. And then I take that and I use that as context for them to develop both their metrics. So I like to include metrics that aren't necessarily revenue drivers or expense drivers as part of the budgeting process because I think it's good to memorialize those and set those as targets during that process and then use that planning narrative to really give context to what the things they're saying they're going to do are and how those are going to affect the financials. And then that kind of brings you into that, into the operational process of the business, where you can kind of serve as like a consultant.

Megan - 00:15:06: And how do you ensure that finance professionals understand and contribute to the company's overall goals?

Joe - 00:15:14: Well, kind of like I was saying. You need to understand the business. If you don't understand how the business works, nobody that works for you is going to either. And once you have an understanding of the business, you know what the value drivers are. You want to keep your finance team, and your accounting team focused on what those business drivers are and how they can enable them. Because really, at the end of the day, what accounting and finance are. We're a customer service organization. For the rest of the organization. We should be focused on how we can make other people's lives in the organization easier and better and generate money doing that and also making sure they're not getting away in the way of what those value drivers are. Sometimes accountants have the tendency to be a bit myopic and focus on, well, this is the policy and procedure, and this is the way we do things, and not step back and look at the bigger picture and realize that, well, maybe we need to go outside what the policy and procedure are in the situation to accomplish the organization's goal. Right, because that's the ultimate goal.

Megan - 00:16:23: And when you made the leap from healthcare to APS payroll, how did you go about learning the business? Because I can't imagine that that's very easy.

Joe - 00:16:36: No, it's not. I ended up taking over because we had one of our key employees leave.

Our tax team and I actually ended up taking over that department at a very critical point in the year for payroll, which was around when we filed W2S and 1099. And it was a crash course, and I worked a lot of hours and I made a lot of mistakes. But through doing that, it really helped me gain an understanding of how the business worked. For somebody that's not kind of gifted with that opportunity, I would say that you have to really ask questions and be humble. You don't know everything. A lot of times finance people are really smart, but that doesn't mean everything about how the business works. And you have to be humble. And I think if you're humble about how you approach things and you're willing to ask questions, people will loop you in. And that's how you start to kind of gain an understanding of how things flow.

Megan - 00:17:46: And can you share an example of how your finance group has played a crucial role in driving business growth and success at APS Payroll?

Joe - 00:17:55: Yeah, a lot of it's been around Simplification, so there were multiple billing models when I started, and one of the first initiatives that I embarked on was consolidating those billing models down into one. That made things easier for me, it made things easier for a lot of other departments, and that enabled us to grow faster. There was the implementation of the data warehouse. So in terms of learning to code and stuff like that, I also went ahead and built an ETL tool to pull data out of our data warehouse, transform it, put it in a data warehouse, and visualize it. And that has given people real-time information about how their teams are performing, which lets them drive growth. The other thing that we did was kind of merge the metric reporting and the accounting process into one process called the MOR. This is a monthly operating report, and what it is, is each team member has a PNL for their department or team, and in it, it has the financials and we allocate revenue very granularly. So if somebody does a value add a business that creates revenue, that revenue gets allocated to them, even though it can be difficult sometimes from an accounting perspective. And it also includes all their metrics and their staffing versus budget, all in a one-page report. And this has really helped drive accountability and kind of alignment within the business. Everybody knows what everybody else is doing and how they're performing.

Megan - 00:19:34: And I'm just curious, how do you get people to understand because not everybody's an accountant? So as you're handing out these PNLs, how do you get people to understand the drivers and what it is that they can have an effect on?

Joe - 00:19:54: Yeah, so I think everybody probably can pretty easily grasp the concept of revenue and expenses. It's money in, money out, and then what's left over is good. If there's nothing left over, there's less than zero left over. That's a pretty simple concept, and you don't need an accounting degree to understand that. What I like to do is the metrics that are reported on that MOR is getting people to understand that those metrics are upstream of what's reported in the PNL and changing the numbers in those metrics is what's going actually positively to impact their PNL. And when people start to understand that and understand what creates value and how that all flows into the PNL and really the PNL is retrospective. We're looking at the past with the PNL. Then they start to understand how they can influence EBITDA and how they can help the organization make money.

Megan - 00:20:59: And as you're looking to make changes across the organization to improve things, how do you get buy-in from other departments and business leaders?

Joe - 00:21:09: Yeah, so it's all about as a CFO, you don't have a lot of direct power. The other departments that you need to do things, they don't necessarily directly report to you. So as a CFO, you have to do a little bit of horse-trading. Sometimes that's in the form of you guys want this new salesforce tool that costs $80,000 a year, which for some reason everything in sales costs $80,000 a year. Well, can you do this for me and start trading? One, you're the gatekeeper to the resources in the organization, so trading on those resources when you think it's going to be a value add. And the other thing is being there's a lot that you bring to the table in finance that you can help people within understand things and extracting data. People in my organization really rely on me heavily to get information, whether it's out of Power BI or running a SQL query against a database. And when people see that you're useful, they're also more willing to be useful to you.

Megan - 00:22:22: And what advice would you have for CFOs out there listening as to how they can partner with the business to grow?

Joe - 00:22:32: Focus on value add activities. It's easy, especially for CFOs that come from an accounting background, to get too wrapped up in compliance and policy and procedure. Focus on the things that you can do to support teams and move things forward and not slow their progress. Sometimes the best thing you can do is just get out of the way and let people do what they know how to do and not tie them down with unnecessary paperwork or route this here for approval before they get things done. A lot of times it's just enablement and getting out of people's way.

Megan - 00:23:07: And lastly, as a finance leader, what is it that keeps you motivated? What is it that you love? What gets you out of bed every morning?

Joe - 00:23:17: I love seeing the tools that I build and the information that I provide to people, getting them to work together and understanding what the goal is. People kind of understand the goal of the business is to make money, but sometimes they don't really understand how to get there. And it's seeing that spark when they finally understand how they're connected to that and how everything that they do ties into that. And then when they start moving in that direction, that's really great for me to see that is when people start to understand graphs, how they tie into the overall organization's performance.

Megan - 00:23:56: Joe, thank you so much for being my guest today.

Joe - 00:23:59: No problem.

Megan - 00:23:59: Yeah. I really enjoyed learning about you and APS payroll, and I wish you both all of the best and all of our listeners. Please tune in next week, and until then, take care.

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