The changing face of finance - is it time for the CFO to shine?

A chief financial officer is ideally placed to spot new opportunities and develop the relationships that help a business grow, Barclaycard's Eduardo Vergara says.

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Last Updated: 09 Oct 2013

With the global economic crisis showing no signs of abating, companies are facing huge challenges when it comes to growing. Budgets are being tightened, access to credit is squeezed and consumer confidence is low. Yet businesses must continue to expand and be more efficient if they are to compete with their peers. It's a difficult juggling act, to say the least, and the chief financial officer is more critical than ever to achieving this.

MT caught up with Eduardo Vergara, CEO of Barclaycard Global Business Solutions, to discuss how the finance function can rise to the challenge.

How important has the CFO become now?

CFOs are absolutely central to the business. They are crucial in identifying savings and driving efficiencies - and that's what funds investment. CFOs also have an insight into every area of the business. They can identify where the next opportunity will be and find innovative ways of creating growth. Certainly at Barclaycard, my CFO plays a key role.

How has the role of the CFO evolved?

It's really changed since the financial crisis started in 2008. As credit markets have become tighter, growing the business is often dependent upon freeing up capital and reinvesting those savings - and it's up to the CFO to find ways of doing that.

It sounds like a tough job. What can be done to oil the wheels?

There are some straightforward things that businesses can do. Some of our clients are finding simply managing payments more efficiently is a great way to fund business growth. In addition, finance needs to work more closely with procurement. It should develop strong relationships with key strategic suppliers to make savings and ensure that they have enough working capital to grow as well, and it should suggest ways they can innovate and expand. That way you create a stronger supply chain.

But hasn't it always been the case that savings are important to staying in business?

Yes, but things have changed. Ten years ago, companies relied on outsourcing and transferring services to cheaper locations to cut costs. Now those opportunities are gone. You need to look at other ways to improve efficiency. Barclaycard, for example, has changed the way it pays its suppliers. We now use single-use accounts and a virtual payment card. Once a payment is approved it automatically triggers a payment to our supplier, speeding up the process. In return, businesses can negotiate discounts from the supplier for paying early. So it's a win-win situation. With Barclaycard's payables solutions, you also get automatic reconciliation and a more accurate figure of what you're spending and more overall controls.

What is Barclaycard doing to help its clients?

We need to help our business clients grow. One way we've done this is to get together with Google to launch the Google AdWords business credit card. This is a card that we give to Google's small business clients so that they can buy advertising on the search engine more easily. At a time when SMEs are struggling to access finance, it's another way of giving them access to credit in order to advertise and grow their business. Barclays Partner Finance is another example - helping companies maximise their sales opportunities by helping their customers afford new purchases. And the benefits are widespread. Helping small businesses grow faster helps the UK economy and supports new jobs.

Should businesses put sustainability high in their priorities?

Companies have to take a balanced view. Consumers now care about sustainability and you have to deliver what they want. Doing the right thing for your customers leads to more consistent growth in the long term. Barclaycard takes into account not only the shareholders and our financial performance, but how we treat our customers and employees, and how we operate in the communities we work in. That's what leads to sustainable long-term growth - doing the right thing for all stakeholders, not least your customers.

MT's conversation with Eduardo is part of MT's Smart Finance series, in association with Barclaycard. For more insight, features and videos, visit www.managementtoday.com/go/smartfinance

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