Tuesday, September 10, 2019

Consulting background prepares CFO for any industry

Source: https://tinyurl.com/yyqo72va

By working with multinational companies, a CFO was able to increase cash flow and improve forecasting at a tech company despite never working in that sector before.

After working for a waste treatment company and a Chilean multinational winery, Horacio Yenaropulos moved into technology in 2017 when he became CFO of Argentina-based Belatrix Software, which develops digital applications for companies. The 25-year veteran in finance said his move into the tech sector was relatively seamless thanks to the training he received during his 14 years consulting at PricewaterhouseCoopers.

"When you work after many years in a consulting firm, you can work in any type of industry," Yenaropulos said last week in a CFO Thought Leader podcast. "At PwC, I worked with several types of industries, and then I moved to a winery, and then I came back to Argentina and I had a chance to join Belatrix. It's the first time I had the chance to work directly in a technological environment, and with a highly regarded, high-growth Latin American software company."

Yenaropulos received his bachelor's degree in accounting in Argentina and his MBA from the University of Pittsburgh. While still an undergraduate, he joined the auditing division of PwC in Mendoza. After obtaining his MBA, he returned to PwC, this time to its Buenos Aires office to work on the advisory side with multinational companies.

"I was in charge of valuing firms, doing due diligence, [mergers and acquisitions] practice, so it was a different type of work, and much more challenging," he said.
Strategic approach

Yenaropulos said it's crucial for CFOs today not to rely entirely on their finance and accounting training, but instead to think creatively, and be prepared to adapt because of the pace of change in business. "Creativity and resilience are the new values of the modern CFO," he said.

At Belatrix, his first task was to unify the company's five accounting systems — each a legacy product of its operations in Argentina, Peru, Colombia, the U.S. and Spain — into a single tool. He brought the systems together over the course of two years using SAP Business One. When the conversion was complete, the finance team was able to give company executives a monthly financial package in addition to a quarterly report, helping them in their decision-making.

"It was clear from the outset I needed to help the owners with the transformation from being a family-owned company into a world-class, multinational one," he said. "It was really world class on the delivery side of products and services, but there was a lot of room to improve the finance side.

"The other challenge was that my team was based in several locations, which, based on distance and cultural challenges, was a decision that also needed to be addressed," he added.

At Hidronor Chile, a water treatment company for which he was hired as CFO in his first non-consulting job, he replaced the company's manual revenue recognition processes with software-assisted processes that cut in half the time it took to settle accounts receivable.

"By implementing a sizable reduction, in days, of our accounts receivable, we were able to generate impressive positive cash flow for the company," he said. "Imagine if a company was not able to invoice for services to the client until it had finished the identification of the waste and its subsequent treatment. So, what we did is, we created a team with the operations people, commercial people and the technology department. We proposed and successfully implemented a plan that reduced the days of account receivables from over 200 days to just 90 days in only one year. This was achieved due to changes in the processes from the client side, from the operations side, and by adding new software abilities to the process."

For Yenaropulos, the main takeaway is to stay flexible and to respond to new situations, just as you would as a business consultant.

"The challenges today are dealing with limited resources and a very risky and competitive environment," he said. "We must realize the requirements change on a daily basis, and each day will bring new challenges. We will need to constantly improve our creative ability to be able to provide answers at the same pace that constant change requires."

That's especially important for CFOs of companies in parts of the world not used to competing head-to-head with giant, well-established global companies. "When you come from Latin American countries ... change and the ability to adapt is a key requirement for a local company to survive," he said. "I can really confirm that these attributes provide a huge competitive advantage for us as CFOs."

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