Investing Smart: Finance Leadership in Uncertain Markets

The Payments Podcast by Bottomline

Episode Transcript

Owen (Host 1): Welcome to the Paymode edition of The Payments Podcast. I'm Bottomline's managing editor, Owen McDonald. This series of payment-themed podcasts looks at the hottest trends in business payments with Paul McMeekin, vice president of marketing at Bottomline, along with expert guests. In this episode, Paul welcomes Aaron Stanhaug, CFO at MHC Automation. Aaron and Paul cover a lot of ground, including the ability to respond to changing business conditions, investing in systems and infrastructure that enable agility, and riding the lightning of the AI era in business payments.

Here's Paul McMeekin and Aaron Stenhaag.

Paul (host 2): Hi, and welcome to another episode of The Payments Podcast with me, Paul McMeekin. Joining me today from one of our partners at MHC is Aaron Stenhaag. Aaron, welcome.

Aaron: Thanks, Paul. Nice to be here.

Paul: Great. And so first, give our audience a bit of a background about yourself. How long have you been at MHC? What are you doing there?

Aaron: Yeah. Aaron Stenhaag here. I'm the CFO at MHC Software. We're an accounts payable and invoice automation platform. I've been the CFO of MHC for the last five years and help lead our strategic finance and accounting, and back office solutions.

Paul: So first question for you, and I could ask this anytime in the last five years you've been there. There's a lot of, economic uncertainty, a lot of volatility, stuff like that. So as a CFO, how are you and your peers in the CFO community balancing long-term strategic investment with the need to stay aligned in a in a volatile economic environment? And that could have been COVID, supply chain issues, inflation, etc, etc.

Aaron: That's a great question, Paul. The role of the CFO has rapidly evolved over the last several years with the likes of COVID, remote work, changing macroeconomic conditions, and global politics. I'd say traditionally, the CFO was viewed more as a scorekeeper of the business, but in today's fast moving environment, the CFO is much more about being a strategic operator. The CFO needs to help guide where the company invests, how it manages risks, and how it positions itself for long term growth. In a volatile environment, balancing long term investment with agility really comes down to strong financial discipline and clarity around priorities in the business.

There are some priorities that I believe are simple and that are non-negotiable. One of those being the investments that drive the future of the business, growth, marketing. But at the same time, you have to maintain flexibility everywhere else so you can respond quickly when conditions change. From a finance perspective, Paul, I believe that usually means focusing on three areas. First, maintaining the fundamentals, meaning managing cash, controlling costs, and maintaining a strong risk management profile. Second, I would say investing in systems and infrastructure that makes the company more adaptive and agile. And lastly, continuing to invest in growth even during uncertain periods. 

When I think about it, I think finance leaders are shifting their thinking around the question of investment. And the question really isn't, should we invest? It's more of where do we invest so the organization can move faster in today's environment.

We're in the middle of one of the biggest changes, I believe, today with AI, and it's rapidly changing the landscape day by day - it changes by the minute. So, in the finance space, you know, when you prioritize investment, I believe that means reducing manual dependencies, increasing visibility into cash and liabilities, shortening financial reporting times. If you do all that, you can create a financial function that can respond much more quickly and adapt those changes within the environment. 

I'll give a quick example when it comes to payments: when accounts payable, payments and document workflow workflows are automated, a few things happen. In our organization, we get real-time financial visibility with that automation. You remove some of the friction within the business, and then you're able to plan and manage your liquidity much more predictably.

Paul: Just a follow-up question then with your own experience at MHC. So you've been there over five years now. What's changed in that five year time period where you talked about going from manual and having visibility, all that sort of stuff? What have you been able to implement in those last five years?

Aaron: You know, when I joined MHC, we had an aged tech stack, I'll call it. And from a payments perspective, 95 plus percent of our payments were going out the door in paper check form. And that wasn't the nature of how I wanted to run a finance organization, nor my history. We consolidated ERPs, migrated tech stack to a much more modern base ERP system, but we also moved our payment structure to what's now 95 percent ACH payments and or wires and 5 percent check. And so we've really changed the landscape of how we do business with our customers or our vendors to modernize that, but it also added control risks and controls in the place to prevent fraud in the future.

Paul: How do you evaluate which emerging technologies, especially AI, and automation? How do you evaluate them delivering real financial and operational ROI versus those that are more hype than actual value?

Aaron: Something that's top of mind for me right now internally here at MHC, and almost every investment case that I review: there's obviously a tremendous amount of excitement around AI and automation, but the ROI has to be justified. Otherwise, it ends up being just additional overhead or something fancy sitting on the shelf, in my perspective. From a CFO's view, the way we try to separate real value from hype is by focusing on where these solutions actually solve operational problems inside of the business. Focusing on finance, I think, the highest impact areas tend to be processes that are high volume, repetitive, and document-heavy. Things like accounts payable, invoice processing, and payment workflows are great examples.

These are areas where AI and automation can meaningfully reduce friction and improve accuracy at the same time. When evaluating new finance technologies, there's a few things I tend to look for here at MHC, or in my career. One is first integration. The best solutions that I've seen in my teams work within your existing ERP or finance tech stack. They enhance what you already have rather than just forcing a large rip and replace, and it allows users to work in one core system rather than switching between multiple systems or ERPs.

Second, they should improve both speed and accuracy simultaneously, and I think that's important. If a technology only makes something faster Paul, but creates more exceptions or more rework it's not, (rework, excuse me), it's probably not delivering real value. It's just shifting process. And third, it should scale with operations without requiring additional headcount growth. Over time, yes, headcount will grow, but it doesn't mean for every dollar of growth, I need another dollar of investment in the back-office function.

Paul: What AI tools have you guys implemented yourselves?

Aaron: We've implemented a number of AI tools across the business. First and foremost, the one that comes to mind is Microsoft Copilot. We use that across the business. Within our finance function, you know, there's a couple of key things we use. We do actually use, Paul, our own invoice automation platform, which uses intelligent capture technology embedded within our invoice automation solution.

So our invoices go into our solution, get read from a vendor, from payment terms, line-level matching, and get fed and routed into an approval process and then routed to our ERP. We've also done a lot of work on implementing our vendor card and our payment solutions, and we use a third party technology there that helps with vendor or vendor expenses and employee expense reports in automating, GL matching, GL coding, and simplifying that process. And we've seen both positive benefits on the finance side and the coding, but we've not only seen that, I've got lots of positive reviews internally from our internal employee users that it's so much easier to use, it's less time to maintain, and and it's more simplified and streamlined for them.

Paul: Moving to the next question about risk controls and fraud resilience, and that good stuff. Given the rise in payment fraud and cyber risk, and you being a heavy check shopper all those years ago, how do you think about building a financial organization that's resilient but without slowing down the business?

Aaron: Another good question, Paul. It's a payment fraud and cyber risk has definitely become more sophisticated over the last few years, and most of it takes advantages of weaknesses inside organizations, rather than, I'd say, brute force. Most of the fraud today isn't really about breaking into the system. You know, when you think about the old school ways, it's more about exploiting manual processes, overworked teams, which I see a lot, and gaps in information. I see it show up in things like email-based vendor changes, invoice manipulations, and manual approval processes.

So when I think about building a payments organization that's resilient (without selling the business), the key principle that I believe is important is the controls need to be embedded into the workflow itself, not just an extra checkpoint in the process. Because when the controls live outside the process, like manual invoice reviews, forwarding emails for inbox approvals, email confirmations, not only do they tend to slow things down, but they're easier to bypass those critical controls and check marks that are valuable to the payments process. 

Another critical piece that we use in our internal systems too is visibility and audibility. Being able to clearly see who approved what, when they approved it and why, is extremely important. That transparency makes it much easier to identify risk, but it also enforces accountability within the organization. When I know that someone's name is gonna be stamped on who approved what, they also know that they're holding themselves accountable for that.

Paul: Aaron, just changing topics slightly. We've talked about AI in in the journey you guys have been on at MHC. As finance teams evolve, what skills or mindsets do you believe that the next generation of high performing finance organizations need to have? So if I'm up and coming in the finance world, what skill set should I be building out?

Aaron: I think finance teams are starting to look very different than they did five years ago or ten years ago, and maybe even three years ago, you know, post COVID era. My background started in more of a technical accounting space. And I think technical accounting will always be important. But what I believe now, in my role that's important and what increasingly defines what I'll say is a high performance finance organization, is a broad mix of skills. You know, things like system knowledge, understanding data and data structure, and strong business acumen are becoming just as important as traditional accounting expertise, especially when you think about AI and the automation in place.

Part of the reason for that shift is that companies can't scale finance teams literally with the business anymore. As organizations grow, you can't just keep adding people for more transactions. Instead, what I see is the most effective, organizations are automating that transactional work and redeploying their teams toward higher value activities. And at MHC, we've spent a lot of time in the automation space and consolidation of our tech stack, and we've reallocated our resources to spend more time on deeper financial analysis, cash planning, and working capital management. 

So when I think about the next generation of financial talent and what I look for in those capabilities or what really stands out is business and system knowledge. Understanding not just the numbers, but I think understanding the platforms and the processes that generate those numbers is critically important. If you don't understand where the numbers [come from] and how it's being done in the system, it's really hard to articulate that. 

Second is business process ownership. You know, finance teams are in a unique position as they aren't just executing those tasks, They are responsible for designing and improving the workflows that run the financial operations of the company. And so that means understanding the entire business model. And without that, it's it's hard to pull everything together. 

And the last thing I'd say is comfort adopting new technologies like automation and AI, which are increasingly becoming embedded in how finance operates. So, at the end of the day, Paul, the culture of finance is shifting more from a process (heavy process!) and transactional one, to one that manages financial systems, provides critical business insights, and supports the business strategically more than transactionally.

Paul: Makes sense. And from a retention perspective, how important is automation?

Aaron: Critically important. I had lunch yesterday with someone in the finance recruiting space. And, you know, at the junior and senior level, the average tenure in the market today is only one and a half to two and a half years. And so when you think about that, if things aren't automated, relying on someone in a transactional space that is jumping around every two years, the time to learn and get up to speed it just puts an organization so far behind, Well, from a processing [perspective], it adds fraud, complexity, and risk - from a process control standpoint. And then there's the overhead cost of onboarding a new employee.

So the more automation that you have there and the more systematic that you can be, the easier it is. And I think it also improves employee retention.

Paul: Totally makes sense. And, Aaron, as we come to the end of our time together, I'd like to ask this one question. If you had one piece of advice for your fellow CFOs or treasurers in your function or in your peer group about the future of payments and finance, what would it be?

Aaron: You know, for the listeners on this podcast, Paul, my one piece of advice would be to really start thinking about payments as a strategic finance function, not just a back office task. I know that's narrowed for this audience, but I think it's important. Payments really sit at the intersection of several things that we as CFOs ultimately own. Payments impact, cash flow, risk and compliance, vendor relationships, and working capital. And because finance touches all of those areas and as a CFO, we're in a unique position to connect the dots and understand the broader strategic impact that the payment operations have on the business.

I'd say the most effective accounts payable teams that I've seen today have very clear visibility in their own payment ecosystem. That includes things like vendor onboarding, vendor change management, real-time spend insights, and the ability to track and manage vendor payment preferences. Once you have that visibility and control, payments can actually start creating value for the business rather than just moving money out the door, which as a CFO, we don't like to see all the time. You know, for example, the best companies I see, and what we are doing here at MHT today, we are increasingly looking for ways to monetize those payment flows, whether that's through payment rebate solutions, whether that's maximizing payment terms and holding capital longer, or better working capital strategies. You know, once you have that automated and digital platform and payment solution, it's much easier to manage your payment cycle.

So my advice, Paul, would be to treat payments as your core part of your finance strategy. Don't just ignore it. When the payment process is modernized and automated, finance gets much stronger control, better visibility, and ultimately better insights into how money moves to the business.

Paul: Excellent. Well, thank you for that piece of advice, Aaron, and thank you for today.

Aaron: You're welcome, Paul. Great. Thanks for having me.

Owen: Justifying the business value of investments like AI, payment solutions that simplify invoice coding and streamline processes, fighting fraud by embedding anti fraud controls directly into transactions. Those are some of the talking points from this episode that are major priorities in B2B payments today. Thanks to MHC's Aaron Stanhaug and to co-host Paul McMeekin. 

To our audience, the smartest people in B2B payments, thanks for listening. Hit subscribe.
Catch us again on your favorite podcast platforms, including Apple, Spotify, Blueberry, iHeartRadio, and YouTube. Bye for now.

The Payments Podcast, from Bottomline.