Kailash Varodia, The CFO of RXIL, a fintech firm operating an online electronic platform for financing trade receivables between MSME sellers and corporate buyers, shares his insights on the role of finance executives in the upcoming year. He believes that finance professionals should adopt the mindset of “Chief Fairness Officers,” emphasizing the importance of empathy and recognizing that the essence of a business lies in its people rather than just profits.
According to Varodia, CFOs should bridge the gap between numbers and emotions, facts and feelings in 2023. He highlights the significance of showcasing qualities such as agility, resilience, curiosity, imagination, people-centricity, and a transformative mindset, all while leading with compassion. By embracing these attributes, CFOs can enhance their abilities as business leaders.
Varodia, drawing from his extensive 20-year experience in financial management, underscores the need for CFOs to prioritize the human aspect of their roles alongside the analytical aspects. This holistic approach will enable them to contribute effectively to the success of the organization.
Q: How is the role of CFOs shaping in the New Year 2023?

Kailash Varodia: Chief Financial Officers (CFOs) are swiftly assuming novel responsibilities as forward-thinking strategists and consultants, offering guidance and insights into the future trajectory of the business rather than solely focusing on its past performance. They assist enterprises in anticipating challenges and opportunities by leveraging real-time analytics, predictive modeling, and more intelligent forecasting techniques.
Moreover, CFOs are required to maintain their role as strategic decision-making partners to the CEOs. The adoption and integration of new technologies have, in some ways, catalyzed a significant transformation in the CFO’s responsibilities, turning them into strategic advisors and visionary collaborators for the CEO. As guardians of the company’s resources, they possess the optimal position to advise the CEO on investment choices and mitigate risks while progressing towards the CEO’s ambitious goals for the organization.

Q: What are the new responsibilities CFOs are likely to take up in 2023?
Kailash Varodia believes that CFOs should expand their involvement beyond finance and engage in crucial areas like HR, operations, sales, and marketing. Rather than limiting themselves to financial matters, CFOs should embrace the role of Chief Facilitative Officers.
Furthermore, CFOs must possess the ability to anticipate upcoming technologies, identify emerging market trends, and prepare for broader economic or political impacts that may influence their businesses. By adopting the mindset of Chief Future Officers, CFOs can effectively navigate these challenges. They should embody qualities such as agility, resilience, curiosity, imagination, a people-centric approach, and a transformative mindset. Developing these attributes will not only make them more effective leaders but also contribute to their overall growth as business professionals.
Q: How should CFOs infuse digitization successfully in 2023?

Kailash Varodia: Digital transformation in the financial sector has evolved beyond a mere technological upgrade and has become a fundamental business strategy. The process involves restructuring and reconfiguring finance and accounting functions using technology to establish efficient operational systems and processes without completely replacing traditional systems. This approach is known as digital transformation in finance.
To enhance their digital strategy, CFOs can address three crucial questions. Firstly, they need to identify the areas where the most compelling digital opportunities and threats are likely to arise. Secondly, they must determine the speed and magnitude at which digital disruption will occur. Lastly, they should devise optimal responses to seize these opportunities and reallocate resources away from significant threats.
Finance leaders should strive to align their digital strategies with desired business outcomes. They should explore the implementation of adaptable planning and budgeting mechanisms that can effectively evaluate the costs and benefits associated with digital initiatives when making resource allocation decisions. Additionally, they should reconsider the methods used to measure the performance of digital investments, as these may extend beyond the conventional capital budgeting approaches.

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

Kailash Varodia: Our firm holds a license from the RBI to operate as a provider of Trade Receivables Discounting Systems (TReDS) for MSME Receivables financing. We offer a comprehensive digital experience that encompasses platform registration for onboarding, initiation of transactions, and settlement of transactions.
As part of our digital onboarding process, RXIL has also integrated C-KYC, Video KYC, and digital document signing. To ensure cost-effective infrastructure management, we have implemented a cloud-based solution.
Within our finance and accounting department, we have seamlessly integrated the Core TReDS system with the accounting system, enabling effortless entry transfer. We have also automated the generation of bills, implemented an expense management system, introduced online banking for payment processing, and recently incorporated an e-Invoicing feature. These advancements not only reduce processing time but also enhance operational efficiency within the system.


https://cfo.economictimes.indiatimes.com/news/in-2023-cfos-must-connect-math-to-mood-and-facts-to-feelings-kailash-varodia-rxil/96843554