1212: When Working Capital Rewrites the CFO Agenda | with Dan Barzily, CFO, Tipalti

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0:16Dan Barzily: Hello, this is David Falizzi, CFO of Saltify, and you are listening to the CFO Thought Leader podcast. This is episode 1212.

0:29Well, it ties somewhat to my statement that until the day I was appointed CFO, I never thought about becoming a CFO. So when I took on the role, we went through quite a transformation in the way we go to market. And that, in hindsight, now I know it and it looks crystal clear to me, but that changed the working capital profile of the company completely. And fast forward from that point, a quarter, we in Vesta were forecast on multiple aspects on the P &L because of that. For me, why it was a strategic moment, because working capital is not something I thought of since my accounting class at university, maybe.

1:18And that moment made me understand that I now have, on top of my previous priorities, I now have an additional set of priorities. Hi, it's Jack. On today's show, we speak with Dan Barcellet, CFO of Tipalti. Every strategic decision carries a financial consequence. But the consequence isn't always where you expect to find it. A changing go-to-market strategy can look like an operating decision. Right up until it reshapes working capital and disrupts the forecast. That's when the CFO's job changes. Strategy can no longer be separated from the mechanics of cash, timing, and execution. Finance leaders today are being asked to move faster, support growth, and still see around corners.

2:19But what happens when a sound decision changes the company's financial profile? Dan Barcellet has lived that moment, and it changed how he understood the CFO role. Our talk begins after this.

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4:10Hello, CFO Dan Barsalai is with us. Dan's path to finance leadership began in engineering before taking him into consulting, corporate strategy, and international business development at American Express. At Tipalti, he moved from chief of staff to chief of strategy officer and ultimately to the CFO office. Today, he's helping shape the company's next chapter as Tipalti expands its AI-powered finance platform and rethinks how finance teams create value. Dan, welcome. Thank you very much, Jack. Happy to be here. Thank you for having me. So, Dan, as you know, we begin asking you to look back in time, get on board the time machine, and identify some of those experiences you feel actually prepared you to become a CFO.

5:05What would those be? Well, that's a big question. I will start with saying that until the day I was appointed CFO, I never thought I would become a CFO. So in hindsight, thinking what made me get to the point in which I was appointed CFO, yeah, I can see sprinkles of it throughout my journey. So if I think about my studies at uni, engineering, analytics, being accurate, paying attention to detail, building models, forecasting, making assumptions on what the future will look like, those are all very relevant skills. then going into consulting, multiple stakeholders. When you go into a project, you deal with the ICs at the bottom of the chain and the execs who are running the company, understanding the different priorities, the interests of each, going into business development, deal making, legal, contracts, understanding it takes a village to bring something to life.

6:19So yeah, I think that any single experience, I can find something that is useful for me as a CFO. Tell us something about when it comes to leadership, what maybe has this role sort of taught you about leadership? Or maybe there's something you've even abandoned saying that's not how you lead in this position. Yeah, generally leadership, leadership in any position, I think good leadership in any position, the principles in my book, at least, are similar. Lead by example, do the right thing, have integrity, always have a goal function with every decision you make, like know what you optimize for.

7:11Very important. We've seen this chief of staff role. I've seen it over, over time, over the last five years, becoming an increasingly, it's no longer as unique as it once was on a CFO's resume. In fact, frequently it's been the stepping stone there. I mean, you left American Express to enter a chief of staff role. Tell us about that. Was there any risk attached to that as far as you were concerned? Certain companies define that differently. I 100 % agree with your last statement, and I think it's all about the person you are chief of staff for. So the interviewing process when I got into Tipalti was pretty comprehensive.

8:03I think I met all of the exec team multiple times, and of course, Gen, our co-founder and CEO, and my leader as well.

8:15we clicked pretty early on I knew about Tipalti when I worked at Amex already impressed by him by the vision, by the product, by the results and at the end of the day it came down to the question is this someone I would like to work for and work hard for because it's an all-in role. And my answer was absolutely yes. So I went for it. Getting to that, again, the chief of staff role, it seems to me like it's a role that allows a senior executive to look in across the organization and take deep dives into different functional areas that they may not have seen had they come in strictly as a particular functional area head.

9:15How's that? Am I close? Yeah, you're close. It's very much, so I would say there's the hygiene factor, chief of staff. So running the exec team, if you will. So the agenda on the weekly management meetings, making sure we are talking about the important things, making sure that decisions are not left out there in the air and someone forgot to discuss something important. And very tactical as well, like assign action items, follow up, like be a bad cop if you need to. So that, after a while, you should do that with your eyes closed. It should not take a lot of your time, but this is like the basics.

10:05then I would say the projects you work on split into two so some after you get to know the business and you have your own insights you initiate your own programs and those were the most fascinating ones I would say so after you get to know the people you understand the processes you see the business you identify the gaps and that's actually what drove my transition in a way from the chief of staff role to the chief strategy role because two years two and a half years fast forward after I joined I actually started to own parts of the business I actually had my own shop and that's not really a chief of staff anymore so I did not work for Ken I worked for the company or for pricing or for the data org or our centers of excellence strategy outside of the U.S.

11:06and Tel Aviv, etc. So, yeah. Is there a... I just want to have you reflect a little bit on your learning within Tipalti. Again, you went to a chief strategy officer role. And again, you said something that's really remarkable. You said you didn't know you gave much thought to the CFO role or becoming a CFO before you were asked to become one. Am I saying that correctly? And why do you suppose that is? I mean, you were in business development back in American Express. You know, you're getting your lines of sight into the business and looking at acquisitions. A lot of things CFOs do regularly. you know, why do you suppose that was?

11:56Did you always think of yourself more as a strategic operator, you know, than a finance person? I mean, that's what it must come down to. And so I'm asking you to counter my thought. Yeah, I think you're probably right. I thought of myself more of a business person, I would say, to generalize it more, more of a business person than a finance person. But then again, I think the term finance person changes as well. Over the past decade, especially in the past, I haven't seen an academic research, but I would bet that over 90 % of CFOs came from an accounting bank background. I am not an accountant.

12:52I worked with finance teams throughout my career, but let's put it that way. Accounting was never on my agenda or something I had to look at as part of my roles. And becoming a CFO, it's at least half of your role. So you have the reporting part, which is accounting. You have the forward-looking part, I would say, which is FP &A. And then you have all the external-facing, investors, fundraising, what I'm doing with you now, etc. etc um so i did not yeah it's not something i aspire to i did not direct my career to get there but again in hindsight it's very hard to connect the dots i think that uh career is not something Zinar.

13:50You do, you build, you try your best, you get good results, the right people hopefully notice it, and then you're given more opportunities. And this is just a cycle that repeats, repeats, repeats, and you never know where it will take you. We want to jump now and find out about Tipalti. We've talked, of course, to this company multiple times over the years, But this is an interesting chapter now that the whole AI world is intersecting finance and company strategy. So for a strategist like yourself, it's a good chance for us to hear how you explain Tipalti. What does the platform provide? Tell us about it.

14:33Who needs it? Where is the opportunity now? Tipalti is the global leader of finance automation for mid-market companies. Hidden market company is a fuzzy definition. I don't think there's an academic definition for what a mid-market company is. The way we define mid-markets are companies that, on the one hand, their challenges as it pertains to finance automation are complex. They are global, they are growing, they are multiple entities They have to comply with various regulatory frameworks Employees all over the world, suppliers all over the world They go, it's complicated On the other hand, they don't have the time and the resources To absorb a heavy solution to solve those complex challenges And they are pretty much left in the middle because the SMB solutions will not cut it and the enterprise solutions are too heavy.

15:41You are talking about a seven-figure just to bring in an integration team before you even start using it. And that's where we come in. So our goal is to bring enterprise-grade capabilities to finance leaders in the mid-market in the way they can digest them, use them, and enjoy them. Our product strategy in three words is breadth, depth, simplicity breadth because a finance leader in a mid-market company wants to consolidate to consolidate vendors to solve multiple pain points AP, expenses, procurement, treasury so that's on the breadth side On the depth side, as I said, it's not your corner coffee shop.

16:34The solution has to have a level of depth to it to actually deliver the value and simplicity because of the time and resources to implement and digest the solution in a way that they could realize the value. So at a high level, this is what we do. And this is a journey we are on for the past 15 years in the company's existence, and we are still on it. With AI, I think finance and accounting is not any different than most professions in AI revolutionizing the way work is being done. We are already seeing it, and this trend will only intensify over time in which humans will do some of the work and agents will do a different part of the work.

17:36So we are... Yeah, I would say most of the resources of the company nowadays are infested in an AI transformation. We can go more into that. I'm sure you are interested in it. A little bit more about Tipalti. Over 6 ,500 customers. We are reaching 100 billion annual TPV. TPV is the remittance that we process annually. Growing strongly. Surpassed 200 million HRR in 2025. Yeah, and the opportunity ahead of us, it was part of your question, is huge. Like the mid-market is a very large market and the kind of solution that we deliver, which is really end-to-end automation,

18:34is not well penetrated yet. So there's a lot of room on the S-curve to continue to climb and we're climbing. Yeah, when we look at towards Tipalti's future, we wonder what is shaping that future today. Some might point to the statement acquisition and the$200 million in growth financing. These are what are going to impact that future. This is what's going to help Tipalti get there. Yeah, of course. I mean, it's all part of our growth trajectory, as well as the AI transformation as a pension. regarding the 200 billion so getting to profitability is a strategic priority for us and we are way way into this journey on the statement acquisition yeah it goes back to the vision of the breadth we want to have a set of solutions that really delivers more and more value to a finance I can tell you from my own experience as a as a CFO of Tipalti and the user of our statement product that if I wanted to know how much cash I have on hand without having a product as we offer we have over 150 bank accounts spread globally if I ask my treasury to get our cash position he needs to log into almost each and every bank download the CSV consolidate them get a number until i get the number the number is out of date um and this we are a mid-market company so this is a pain all of our customers experience it's a real pain because finance leaders need to know how much cash they have on hand on a daily basis i would add and uh solutions such as a statement uh delivers that that value this is only the first layer of the statement product.

20:37There are two more. So that is definitely a growth driver for us. We'll narrow our lens a little bit on Tipalti's revenue model. It combines subscriptions with transaction fees. Which side would you say best explains the business today? I would say they come together and they're inseparable. We are a innovative software company that sells software, but we are also a regulated payments company. We are regulated by all states in the US, by the FCA in the UK, the Canadian regulator, the EU Commission. We actually touch funds and move them globally. And also the value of Tipalti is marrying the software with the payments.

21:37So we are not selling the software without the payments. A Tipalti user gets the full automation by, just as an example, capturing the invoice, processing the invoice, paying the invoice, reconciling it back to the ERP. If upstream you have the PO, it does two-way repatching, it's all part of one flow. we always like to understand better maybe the operating inputs and the visibility you have into revenue. And for this model, I'm thinking, okay, he's looking at payment volumes. You've already mentioned those. Module adoption and customer expansion. Am I on target or what do you watch most closely each week is really what I'm curious about.

22:27Yeah. Well, I'm watching so many things. first of all yeah you can start so always starting at the top looking at revenue as a whole then breaking it into into active accounts within within accounts splitting it by the use case as you said the tax rates monetization per dollar remittance uh usage of our ai products how much is repeat usage um effects float interest sass number of invoices like all of it all all of it But generally, it's split into software, payments, and float, which is interest we make on the funds that we process. I just want you to go back in time, maybe. You previously led pricing at Tipalti.

23:20and I'm wondering if you can look back in time for us and say which pricing decision illustrates maybe how the company makes decisions or trade-offs. Yeah. You had a... From that experience. So first I will just say that I still lead pricing at Tipalti. I kept it at my shop. In my shop. the way we price we price for value we price for the lifetime value of the customer rather than optimizing for the short term and as the platform evolves our pricing evolves as well like in the past used to be a seat based pricing for our platform we don't have that anymore I think we were we were of the first ones to transition from seed-based pricing to platform-based pricing.

24:24But I would say the guiding principles are pricing for value, not optimizing for the short term, but for the lifetime value of the customer, and also making sure that our pricing reflects the changes we make to our product. Let's touch on AI for a little bit here. When you consider AI and where it's adding value today, Tipulte's AI agents, where is the clearest value being created? And again, is it invoice workflows? I think you've talked about compliance. Is it reporting? Where is the clear list, where it's obvious so far adding value? Yeah, so I think there are a few things. There's that time saving for the people using Tipality already.

25:17So create a dashboard for my outstanding invoices for this and that supplier. How late are my payments in this specific entity? So all those things that used to take time to fetch are now just free text. You ask them, you get them done. the next gen 2 are actually you will have an agent running Tipalti for you in a way so you will have full control but it will be 99 % automated so agents that will any workflow on Tipalti will be done by an agent the user, our customer will have to press the button, but you could think about the next gen of Tipalti agent as a junior team member who joined, knows your company, is plugged into all the information you have in Tipalti, and our churn is very low, so we have a lot of data on our customer for years.

26:31And the more trust you develop, Exactly the same with a junior team member. The more you trust your junior team member, the more you delegate, the more responsibility. Yeah, so it's coming soon. But as Tipulte expands agentic AI, where's the hardest, let's call it the hardest line between automation and human control? Where are you saying, nope, we're not going to go there? Where is that happening? Yeah, so as I said, control, especially in finance, the cost of an error is very high. So pressing the button, I will give me as an example. To approve a payment, I would like to press the button. and I assume any finance leader would want to press the pattern as well as it stands now what will happen in the future who knows so it's very important for us to emphasize that the control stays with the human

27:43this is a guiding principle other than that the mechanics of the platform yeah I don't think we encountered that question there what is it that maybe remains unresolved when it comes to ai as it enters more of the workflows what's the conversation like what what do you should customers pay differently don't know oh pricing pricing yeah definitely customers will have to pay differently how differently i do not know yet but but but again pricing for value if the value of t of of Tipalti was X and in the new world the value of Tipalti is 2X like you need to somehow and also I would say with my CFO hat now AI comes at a cost like all those LLMs in the background are not for free as you know so it's a very interesting dynamic I do not have all the answers yet but this is actually you are spot on because those are conversations we're actually having nowadays.

28:57How to price, but first of all, we need a validation that the value is there. We are convinced, but we would like to see it. And then pricing comes after. First of all, you want to put great products in the hands of your customers. Monetization comes organically out of it. well we're up to what we like to refer to as our finance strategic moment and again this might have happened anytime during your career dan we're just looking for one moment of insight or a story you can share that reveals finance playing a strategic role what what comes to mind when we ask for a finance strategic moment well it ties ties somewhat to my statement that until the day i was appointed CFO.

29:48I never thought about becoming a CFO. So when I took on the role, we went through quite a transformation in the way we go to market. And that, in hindsight, now I know it and it looks crystal clear to me, but that changed the working capital profile of the company completely. And fast forward from that point, a quarter, we missed our forecast on multiple aspects on the P &L because of that. For me, why it was a strategic moment, because working capital is not something I thought of since my accounting class at university, maybe. And that moment made me understand

30:42that I now have, on top of my previous priorities, I now have an additional set of priorities and agenda items, which should be very high on my list. And it really hits me, okay, I'm now the CFO and I'm in charge of those things. So for me, at least, that was a strategic moment as a CFO. And it happened shortly after I was appointed as well.

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32:13Thank you for that. I was going to just say that my next question usually goes back to that first 90 days as a CFO role and things that might not have been expected. You're, as we've already talked and discussed about, you have a very unique experience there. But I'm wondering over the, now that you look back and you think about the role you currently have, what advice would you have for career-building executives who would aspire to be CFOs within their organizations? What is it that, and again, I think it's the type of experiences we've been talking about, your own trajectory, but what should the finance career path look like today?

33:05Let me say that. I think it could begin, it could go in many different avenues. It can go from accounting, finance, banking, operations. If it's something you aspire to, I'm sure you can find your way to become CFO. But then you touched about the first 90 days and what can make you a good CFO and a piece of mentoring advice. and I think that 90 % is the team you have. So especially for me, coming to the role with certain gaps, which I worked very hard and still working on closing, you are as good as your team. I ask my team to train me and teach me on things more often than not. and maybe teaching is not the right word, but I am there to make the tough calls, insert myself where there's ambiguity, set the strategic direction, the priorities, the principles.

34:19But to do the day-to-day work, you need to rely a bit on people who are better than you are in doing the job itself. Yeah. So, Dan, it's time for us to ask you to reflect a little on the personal side. What's generally something maybe your Tipalti colleagues don't know about you? Something from your past, an interest that you've had? Something from the past outside the professional world. Well, I used to be a bartender for many years and I met my wife while I was bartending and she was a customer at the bar. What was her likely favorite drink? She's light. She's light. Probably a glass of red wine or something.

35:02Hey, what about a book or a resource for us? Something that might reflect your thinking? I don't know. Is there a book that maybe influenced your thinking? I don't read too much professional literature, but I do consume a lot of journalism. So I'm subscribed to The Economist, The Wall Street Journal, Financial Times, The Israeli. And yeah, I get a lot out of it. A lot out of it. What do you respect the most globally? in terms of giving you a glass. Is it the Financial Times? The Economist. Economist as well, giving you the global perspective. Yeah, global perspective and well-balanced and very broad.

35:46Well, thank you for that. We're up to our final question. We're going to ask you to look forward the coming 12 months. We want to know what your priorities are as a CFO. What would those be? and picking strides on the AI transformation in my team, hitting profitability, and maintaining our high growth. Dan Barzile, thank you for joining us on CFO Thought Leader.

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36:57Thank you.