Corporate finance teams are using increasingly sophisticated tools to evaluate investment decisions. Financial modeling, scenario analysis and real-time data now play a central role in how CFOs assess risk, determine hurdle rates and guide capital allocation.
However, new data suggests many organizations are also still working to modernize the operational systems that support financial reporting, compliance and day-to-day finance.
On March 10, the Association for Financial Professionals released the 2026 Cost of Capital Survey that examines how finance teams estimate weighted average cost of capital and evaluate investment opportunities. Then Basware, a provider of accounts payable automation and e-invoicing software, released a report on the same day dubbed the Compliance Wake-Up Call, exploring how companies manage invoice and tax compliance as regulatory requirements expand globally.
When analyzed together, the findings suggest different parts of the finance function are evolving at different speeds. Strategic finance teams continue expanding their use of new technology, financial models and analytics to guide investment decisions, while operational finance teams are still working to modernize legacy systems and processes that support incredibly important fundamentals of finance like compliance, reporting and payments.
Capital modeling becomes more data-driven
Data shows that financial modeling remains a core component of how organizations evaluate capital allocation decisions. According to the AFP Cost of Capital Survey, nearly two-thirds (62%) of organizations use their calculated cost of capital as the standard hurdle rate when evaluating projects, while slightly more than one-third (38%) set hurdle rates above their cost of capital to reflect additional project risk. Just over half (51%) report adjusting those thresholds in response to shifts in market conditions.
The models used to estimate those thresholds are widely established across corporate finance teams, often supported by modern FP&A tools. The AFP survey found about four in five organizations (83%) rely on the capital asset pricing model to estimate the cost of equity, and the same share report using discounted cash flow analysis when evaluating investment opportunities.
Finance teams also incorporate a range of market inputs into these calculations. Slightly more than half (55%) say geopolitical risks influence cost-of-capital estimates, while 51% report using real-time data analytics to inform those calculations, according to the AFP research.
Responsibility for determining the weighted average cost of capital is typically shared across finance teams. Roughly one-third (34%) say treasury teams handle those calculations, while a similar share (32%) assigns that responsibility to corporate finance departments.
These estimates play a role in decisions ranging from mergers and acquisitions to capital investments and expansion planning, reflecting how many corporate finance teams rely on structured modeling frameworks and market data when evaluating strategic investment decisions.
Operational finance systems continue to modernize
While capital modeling plays an important role in corporate finance strategy, organizations are also continuing to update the operational processes that support compliance and financial reporting.
As e-invoicing mandates and tax reporting requirements expand across jurisdictions, many finance teams are adjusting their systems and processes to manage those obligations. Basware’s report notes that more than 50 countries have already mandated business-to-business e-invoicing, with dozens more planning similar requirements as governments move toward real-time tax reporting systems.
Many organizations are still building the internal structures needed to manage these responsibilities. According to Basware’s research, only 13% report having a cross-functional team responsible for compliance across finance, tax, IT and procurement functions.
Finance leaders also report ongoing oversight challenges. Eighty-three percent say fragmented approaches to compliance expose their organizations to operational and regulatory risks.
Compliance challenges are already affecting business operations. Nearly half of organizations (47%) say missed compliance deadlines have affected market expansion or ongoing business activities. Confidence in global compliance readiness also remains limited, with only 35% saying they are highly confident in their ability to implement country-specific e-invoicing requirements.
Operational finance processes also continue to evolve as companies adopt new technology. Organizations, some with more challenges than others, are implementing digital tools designed to manage invoice processing, tax reporting and regulatory documentation across multiple jurisdictions. At the same time, some companies still rely on manual workflows. About one in four organizations (25%) say spreadsheets remain a key component of their compliance processes.
Finance leaders balance strategic planning with operational oversight
As the scope of the finance function expands, CFOs are increasingly responsible for both strategic capital planning and operational oversight.
The findings from the two reports highlight how these responsibilities are evolving in different ways across the finance organization and may be resulting in a significant technological gap. CFOs and their teams continue to rely on legacy systems and structured financial models in back-office finance when the arguably more attractive and strategic elements of finance are evaluating investments and long-term planning decisions using new tools and technology.
As regulatory requirements expand and companies operate across more markets, finance leaders are placing greater emphasis on improving visibility into operational finance processes. Now, these priorities sit alongside the strategic finance responsibilities that guide capital allocation, planning and long-term business strategy.
