CFO’s Tap Time-Saving Tech and Tools to Offset Macro Challenges
The job of a chief financial officer (CFO) is like putting together a puzzle, as CFOs must manage rising interest rates, inflation and other pieces of a bigger picture.
“It’s challenging, but I like puzzles, so it’s a lot of fun,” Kapitus CFO Anthony Rose told PYMNTS.
All those pieces are especially important to keep an eye on for companies involved in small business lending, he said, where the biggest challenge is sticking to a risk-management strategy that isn’t too conservative — or too aggressive.
That’s especially true during times of economic uncertainty.
Kapitus focuses on small business financing, providing growth capital as both a direct lender and a marketplace.
“We finance small businesses, and so we’re in the risk-taking business, right?” he said. “We’re not risk avoidance — it’s the risk management business.”
Making Changes on the Fly
Rose has been with the firm since 2018 and previously held positions at Credit Suisse and J.P. Morgan Chase.
Interviewed for the PYMNTS series “A Day in the Life of a Digital-First CFO,” Rose said the company has been growing, and continues to do so, but he and his colleagues must also keep an eye on the present uncertainty in the economy.
Rose said he devotes a lot of his time to thinking strategically about both macro issues and secular ones, such as what’s happening with banks — and his company’s competitors.
In addition, because the company has moved to an agile finance function, Rose and his colleagues do quarterly forecasts that look a year ahead.
“You still ground yourself because you don’t want people to move the goal line, but you give yourself more agility to make changes on the fly as you see conditions change on the ground,” Rose said.
Managing a distributed workforce, including those in a recently opened office in India, is another challenge. As most companies have learned, training, leading and managing people working remotely is a challenge.
“You kind of discover that you don’t need everybody in a room to close the books,” Rose said. “There are some tools that you have there as well that help a close management process.”
Accessing Capital
Even during the current volatile period, Kapitus has been able to continue to finance its growth with a revolving credit facility and its securitization. Access to capital is important for a company that’s in the business of financing other companies.
“That’s another thing that keeps me busy during the day is constantly trying to figure out capital sources, access to liquidity — especially at a time like this — that are available and that are cost effective,” Rose said. “But we have a good team, we have great partners as it relates to financing, and so we’ve been able to constantly tap the markets at competitive rates.”
Kapitus has a two-year liquidity model that looks at its needs daily, and one tool that has helped here is Anaplan, a system that assists with liquidity modeling.
A Proactive Approach
Looking at the current climate for small businesses, Rose said it’s an interesting time because there’s a robust labor market, but there’s also inflation. Businesses are anxious to hire, while consumers are tapping the brakes.
“Again, I go back to what I spend my time and what the management team spends their time on is navigating that: What is the right posture from a risk-return perspective that we should be dealing with right now?” he said.
Kapitus hasn’t seen much change in the credit quality of the book, as the economy seems to be doing fine, but, at the same time, it is proactive with customers and has a group that reaches out to any who may need help.
“I consider myself as much a finance person as a data person,” Rose said. “When you think about how we manage the business — data — and oftentimes there’s data that you could see to understand if there is stress with particular regions, industries or certain types of borrowers where you can be a little bit proactive in terms of offering help to people.”
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