In his first five years as chief financial officer at Total Transit, Lawrence Eisel helped quadruple the company’s revenue. To do that, he implemented several changes that showcased his vision, including implementation of a balanced scorecard process, establishing an internal audit function and coordinating an estate planning project that will ultimately save millions in future tax liabilities. And to combat a tighter insurance market and increasing auto liability premiums, Eisel and his team successfully identified alternative insurance designs and created a captive insurance entity, which will control the costs of the company’s auto liability risk.
Those efforts earned Eisel a 2014 CFO of the Year Award from the Arizona Chapter of Financial Executives International (FEI). Now president of FEI Arizona, Eisel is helping the organization’s members navigate an era of great change for financial executives. Az Business talked with Eisel about those changes and the shooting role and responsibilities for CFOs.
Az Business: What is your biggest challenge as president of FEI Arizona?
Lawrence Eisel: The biggest challenge within the Arizona chapter is keeping FEI relevant to the younger demographic. Our chapter provides great value to our members in the form of continuing professional education, peer networking, career management services and advocacy at the national level.
Millennials, however, get their education and networking accomplished in non-traditional ways. It is important for our chapter to adapt and deliver our value in a variety of ways to meet the future needs of our members.
AB: How have you seen the role of the CFO change over the last decade?
LE: The role of the chief financial officer has migrated from finance and accounting to corporate strategy. The CFO participates in company strategic decisions, including everything from transactions to providing assessments of new business opportunities that go beyond determining the cash requirements for an investment.
Many CFOs oversee information technology, human resources and often negotiate prices with customers. In addition, most don’t really spend a lot of time on the financial numbers anymore. Instead, they are focused on operations and strategic planning.
AB: How do you expect the role of the CFO to evolve over the next decade?
LE: Chief financial officers will be more involved with supporting and even developing strategy. CFOs must be versatile with the talent to meet a continually changing set of circumstances. While today’s CFO must still focus on cash flow, internal controls, costs and risk, they must seek profitable growth for their organizations.
AB: How is the Financial Accounting Standards Board’s (FASB) new Revenue Recognition Standard going to impact CFOs?
LE: The new revenue rule won’t affect every company, but every CFO needs to obtain a comprehensive understanding of the change. If a change applies to their organization, the CFO needs to communicate the impact to its executive leadership team and other key stakeholders.
Until implementation (2017 for public companies and 2018 for private companies), the change to the revenue recognition standard will impact the CFO’s planning, forecasting and budgeting activities.
AB: How is the FASB’s new Lease Accounting Standard going to impact CFOs?
LE: The new Lease Accounting Standard will impact CFOs in the same way as the Revenue Recognition Standard. Unlike the revenue standard, this lease accounting standard will likely impact almost every organization.
Implementation of the standard occurs in 2018 for public companies and 2019 for private companies. Understanding the standard is the first step. Evaluating the impact to the organization’s financial statements is the second step. Finally, incorporating the impact of the change into the planning, forecasting and budgeting cycles will be critical.
AB: How are concerns over cybersecurity impacting financial executives?
LE: The CFO or the chief information officer (CIO) is typically responsible for the company’s cybersecurity program. Data breaches can be exceedingly costly and can jeopardize any business. Financial executives must understand their organization’s vulnerabilities and develop a risk management strategy to mitigate the risks of a data breach.
AB: What are your goals as president of FEI Arizona?
LE: As president of FEI Arizona, I would like to see our chapter membership grow from 175 to 200 active members. In partnership with our sponsors, our chapter will offer even more opportunities for education and peer networking over the next year.
We also have an amazing roster of dinner speakers this year. My goal is for our members to attend as many of these events as possible. A large group makes the question-and-answer session fun and provides incredible value to those interested in peer networking.