Speaker 0: The Payments Podcast from Bottomline. Owen McDonald (host): Welcome to The Payments Podcast. I'm your host, Bottomline Managing Editor, Owen McDonald. Commercial real estate finance is operating very differently today than ever before. Market pressure is intense, operating costs are rising, and the CFO is no longer confined to the balance sheet. In real estate, the office of the CFO is becoming a strategic control center for the business working across operations, technology, data, and investments. It's an important change because finance leaders are being asked not simply to explain what happened, but to see what may be coming next and help shape the outcome. To explore what this means to the commercial and residential real estate sector, we're delighted to welcome Carla Hinson, Vice President of North America Solutions and Innovation at MRI Software. Carla Hinson, welcome to The Payments Podcast. Carla Hinson (guest): Thank you. It's a pleasure to be here. Owen McDonald: We're very glad you could be, and I'm looking forward to this conversation. I am going to get right into it, Carla. For some time, we've been hearing about CFOs and their purview moving from the back office, quote, unquote, to a more forward-looking shaper of corporate strategy. In your view, Carla, what's driving that? And what does it mean in terms of how CFOs operate day to day now versus a couple of years ago? Carla Hinson: Well, in real estate, the CFOs really become more of a strategic business partner and that's because the market conditions are changing so quickly. So, we've got interest rates, operating cost, occupancy, and tenant behaviors, all impacting performance. Not that we didn't have that before, but there seems to be a lot more pressure in those areas. So, today's CFO, they're not just closing books. They're helping shape investment decisions. They're optimizing performance, and they're identifying risk before it impacts the business. I think that's significant because that means they're much more ingrained and part of the business. Because looking at all those different pieces, that really requires real time visibility, and they have to be able to act proactively instead of reactively. So, they really have to be embedded in understanding the business more. Owen McDonald: As we talk about this, can you give me an example of how the office of the CFO and the finance team is becoming more involved in strategy? Carla Hinson: Absolutely. So, in the office of the CFO and in finance, we've had a lot of data for years, obviously. But some really important metrics were kind of hidden in there, around, maybe a tenant's, likelihood of paying on time or paying. That's a significant indicator. That's something that passes across their desk. I think that was probably the first step that I started hearing is that we have this data. We can actually start to understand, are they going to pay on time? And then there's some other indicators financially, are they actually going to renew? So, I think that was really the entry point where I started to see the CFO, more in the business than helping drive decisions and really looking at that data. That previously was probably more one-off property manager at a location. This is more broad portfolio look. Owen McDonald: Right. It's moving the decision making into the corporate center. That makes me think many organizations have invested heavily in finance technology for this very reason, yet they still struggle with visibility and control. Carla, why is fragmentation across AR, AP, treasury, and payments still such a major challenge? What needs to change to gain visibility and control in these areas? Carla Hinson: Well, I guess the thing is real estate is kind of unique because the financial data does live across multiple systems a lot of times. You've got property management. You've got leasing, procurement, payments, and more. There's plenty that we can name. If each of those systems is working well individually for that department, they continue to work that way. But the problem is if they're disconnected, those processes actually create blind spots, which is what we see when we see fragmentation. But in that case, the opportunity there, it's not necessarily about replacing everything. It's connecting an entire financial workflow. It's how the work moves through the entire business related to finance so that teams can have a trusted view of the cash, the risk, and the operations. And we have a lot of ways to do that now, technically. So, it's a very interesting time because I think there's an incredible amount of opportunity to finally tackle the fragmentation issue that's been there all along. We are not short on data. Real estate has never said, we need more data. We need access to the data in a way that's consumable, in a way that's connected. And that's really my hope for where we're headed in technology now. Owen McDonald: Just out of curiosity, where does fragmentation often show up first? Where does it tend to get noticed first? Is it just too many systems not talking to each other? Does that tend to be the main culprit, or is it something else? Carla Hinson: I'm going to say it's a tie for first place. So, first is different systems not talking to each other, absolutely, because whenever you find a system that works very well for a particular department, they tend to keep using that system, and they're very focused on their deliverables and their metrics, and rightly so, because they're doing what they need to succeed for the business. But I would say the other factor, that is right up there, is the magical spreadsheet. When someone has a spreadsheet that's got a column or two on it that they have been keeping for years, probably on the hard drive. And those two columns, that's the source. That's the source for that data. So, I don't think it's intentional. I think it was a necessary thing for many years where we were, and now we don't have to be that way. So, it's a lot of change to bring that data and expose it and get it available to everyone when you're very used to having that privately. So, I feel like there's a little bit about things. There are systems and then, we all became Excel experts. Let's face it. That's a fact. Owen McDonald: I thought that was a really excellent explanation of why we're fragmented here. And kind of dovetailing off of that, there's a growing view that operational cash flow isn't just a metric anymore. It's a control indicator for the business. Do you agree with that, Carla? And if so, how should real estate CFOs rethink cash flow in that context? Carla Hinson: Well, I do agree with that statement. Cash tells you what's happening today, but it can also predict what's likely to happen tomorrow. So, in real estate, operational cash flow reflects tenant health, payment behavior, vendor performance, operational efficiency, and CFOs should think of cash as an early warning system. So, it really helps identify the issues before they become financial problems and that could give them confidence to make decisions faster. I can't have a conversation without saying AI, so I'm sorry I'm going to say AI right now. I really believe that the whole idea of seeing signals and data and things that might happen is extremely important. I think this is the area it's most important in because if you think about what's happened today, but looking at what could happen so that you can change an outcome, that's where they have to be looking, and I believe cash is a great early indicator of that. Owen McDonald: You read my mind. My very next question was going to be AI, and, of course, you're absolutely right. It's unavoidable and it's obviously changing finance. CFOs are having to balance innovation with risk and governance, though. So, Carla, how should finance leaders think about adopting AI in a way that creates value without compromising control or trust? Carla Hinson: Yes, that's a big one right now. So, the biggest thing is AI shouldn't replace financial judgment. It should enhance it. It should do that with all roles. So basically, it's a role elevation tool when it's done properly. But the most successful organizations that are using AI to surface insights, to automate routine work, all of that repetitive work, and recommend actions while keeping humans in control of those critical decisions, those are the organizations that are going to win. And so, in real estate, trust, governance, auditability, we are talking about the office of the CFO here, and security, they're just as important as innovation. And so, I think the goal is AI that helps finance teams move faster without sacrificing confidence and trust. A lot of AI is probabilistic. You ask a question and you might get a couple of different answers, but that is not what's needed for the CFO. You need deterministic AI. And I think that there's a lot of learning right now about the difference between the two and making sure that you get the right AI tools, basically. Owen McDonald: I like it. A deterministic approach to AI. I like the specificity there. Something in what you said though, where do you think companies should be cautious with AI? Carla Hinson: I believe companies should be cautious with AI with anything around decisions that impact humans because at the end of the day, there are certain things that humans can provide that AI can't. Context, ethics, empathy, resilience, and ultimately, compliance. That's why it's so important to have a human in the loop throughout the process and review. And anytime you're making any kind of decisions related to humans, housing would be one, but any of those kinds of decisions related to humans, I think you need to be extremely cautious to make sure you've got the right amount of reviews in there. Owen McDonald: Yes. I tend to agree. You've got to have a human in the loop for the judgment and to make those kinds of decisions that affect humans, quite frankly. Last question. For years, the focus was on automation and efficiency. Now we're hearing more about outcomes. You foreshadowed that a few minutes ago. We're talking about cash certainty, risk reduction, decision confidence. Why is that happening now, Carla? How should organizations measure success going forward with those changes? Carla Hinson: It's been an interesting ride. I've been in Prop Tech for over twenty-six years, and it's been so great to see the changes progress, and especially the way they've accelerated recently. So, when we thought about automation before, that solved the 'doing' problem. We just need to get some more things done. But today's challenge is really about making better decisions and driving outcomes. So, CFOs want to know that they'll collect rent faster, that they'll reduce payment risk, that they can improve forecasting accuracy, we all want to do that, and strengthen working capital, which has refinancing and things. There's a lot going on there, too. So, success is no longer measured by how many manual tasks were eliminated. That's important because we're freeing up the humans to do the things humans do best, but it's really shifted now that we're understanding what we can do more with AI. It's really measured by outcomes that improve financial resilience. They create a better experience for owners, operators, tenants, and vendors. So, it's very interesting to me that by inserting AI and getting some of the repetitive work out, we have actually used technology to focus more on humans. Look at that last statement I said. It's really to get a better experience for owners, operators, tenants, and vendors, the humans. That's been fascinating for me to watch over the last couple years. Owen McDonald: That's a very interesting point. Well, there you have it. The role of the real estate CFO is expanding rapidly, and technology is helping drive that transformation. Finance is becoming more connected to operations. Data is becoming more valuable when it can point forward instead of only looking backward, and the CFO isn't just keeping score. Finance is crafting what happens next. A huge thanks to Carla Hinson of MRI Software for sharing her perspectives 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, Blubrry, iHeartRadio, and YouTube. Bye for now. Speaker 0: The Payments Podcast from Bottomline.