If you’re following the headlines regarding the state of the economy in 2024, you may be feeling a bit of whiplash.
On the one hand, if you’re in the artificial intelligence (AI) game, your business may be feeling hotter than ever, with valuations of AI startups continuing to rise alongside Nvidia’s record-setting stock rally just a few weeks back.
Despite a hot streak for AI, however, the larger global economy remains bogged down by higher interest rates from central banks in the United States, Canada and other leading economies in an attempt to tamp down on inflation.
While the latest economic data (including employment figures from January) indicates that interest rate tightening may be pushing the larger economy in a healthier direction, the U.S. Federal Reserve stopped short of cutting rates in the most recent statement to the House Financial Services Committee.
All of that is to say that while there are indications the economy is trending in the right direction, there are still very real challenges that are hindering many companies from achieving their growth goals—even just 3 months into 2024.
With higher–than-usual interest rates pushing borrowing costs to their highest point in decades, for instance, traditional avenues to scale are simply harder to come by.
In this blog, we’ll unpack how finance teams at innovative companies can work smarter to achieve growth despite market headwinds as Spring 2024 rolls on.
Step 1: Better visualize, organize key data
As we recently discussed on the blog, mid-market CFOs—those working at businesses with annual revenues roughly in the $10 million to $1 billion range—have flagged “data visualization” and “business intelligence” as their top areas for improvement in 2024, and for good reason.
For starters, many financial teams are wasting a lot of time just getting access to the data they need to make informed decisions and optimize their cap tables.
That’s not to say that businesses haven’t been working hard to introduce new technologies that better collect and organize data from different corners of the business. But from the POV of many financial leaders, much of this data remains extremely siloed.
“[…] functional leaders in sales, marketing, supply chain, operations, risk management all have plugged technology in that can capture data and make what was once not measurable, measurable,” CFO Alliance CEO and Founder Nick Araco noted in their latest CFO Sentiment report.
What savvy CFOs will need to prioritize to unlock the true potential of this data are systems that automatically synchronize relevant and related data, while delivering actionable insights that can help these teams budget for growth.
Look no further than the product or R&D department for proof.
Teams that leverage Boast’s platform to align the key project, payroll and financial data into a single system of intelligence not only enjoy 20 percent higher returns on their R&D tax credit claims, but spend significantly less time filing—only 6-8 hours a year compared to 20+ hours working without a tech-enabled partner.
This is just one example where CFOs can better organize and align their data to tackle their growth targets, and stretch their investments further.
Step 2: Deploy AI where it counts most
Whether they like it or not, CFOs often steer their organization’s tech adoption—even at more mature businesses outside of the middle market. After all, CFOs are the ultimate budget owners, and (ideally) have the holistic view into costs and returns to guide where new investments can have the greatest impact.
While AI solutions, for instance, are widely touted as game changing in virtually every corner of the business—after all, the International Monetary Fund forecasts that 60 percent of jobs in advanced economies will be impacted by AI—new research has emerged that shows where teams are enjoying the greatest returns on these investments.
For instance, a recent saascan survey that took in perspectives from investors across both the U.S. and Canada found that generative AI is transforming how SaaS companies build products more than as a solution for general productivity.
In this dimension—ie. Product Design and even R&D—deploying generative AI to streamline processes could have a twofold payoff: Teams will not only drive more innovation, faster, but they may be increasing the number of activities and investments that qualify for R&D tax credits in the process.
Similarly, research from Gartner has found that 80 percent of large enterprise finance teams will be using AI by 2026 to improve and accelerate decision making. Boast sits at the intersection of all of this, offering an AI-driven approach to claiming innovation funding that bridges workflows across both finance and product to deliver more actionable insights.
Step 3: Prioritize innovation
This next point may seem obvious, but it bears repeating: No one is going to pay for a boring or unoriginal product.
On average, teams that put innovation at the core of their business unlock greater profitability and even better shareholder value in the long run. While this is especially true in the context of R&D and continually funding your product teams to evolve and cultivate new products, it’s also true for businesses that look to innovate in all dimensions.
In finance specifically, leaders have been notoriously slow to embrace the digital transformation that has been a topline priority across almost every other area of the business. But given how quickly AI has accelerated the pace of innovation in virtually all sectors of tech, there’s no time to wait in helping CFOs modernize their approaches to achieve growth in 2024.
This is especially true given the continued market uncertainty outlined at the start of this post, as well as the pressing need for businesses to continue developing unique products and services.
Modernizing finance to achieve growth
At Boast, we aren’t just using AI for the sake of the buzzword. Our platform is unique in our industry for making it easy for finance teams to visualize the true state of their R&D and capture key non-dilutive funding.
This is especially critical as investors are upping the ante when it comes to operating budgets, indicating that a 24+ month runway is now the “new normal” baseline for healthy businesses within their portfolio
To extend your runway, you need to be sure you’re capturing every opportunity to stretch your dollars further. Both Canada’s SR&ED tax credit and the R&D funding programs from the U.S. federal government offer non-dilutive avenues for founders to reclaim a significant portion of the innovation investments they’re already making, essentially unlocking the opportunity to double down on their most impactful projects.
In the context of investors, businesses that take advantage of these non-dilutive funding opportunities are showing that they are savvy with their budgets, making their business a stronger candidate for funding—whether equity or debt—than businesses that leave this free money on the table.
Finally, by receiving money back from the government to continue funding innovation, you’re demonstrating to investors that your R&D is so impactful that even the federal government wants to support your success.
This could be one of the most powerful bona-fides in your corner when pitching your solution to potential investors.
To learn more about how Boast combines leading technology with years of expertise in the innovation ecosystem for the industry’s leading R&D tax credit solution, talk to an expert from our team today.
