7 Reasons CFO’s are Ditching Manual Payments
Originally appeared in LinkedIn
While many Chief Financial Officers have helped their companies weather the past two years’ financial storms, some businesses still struggle to stay afloat. According to the latest data from the Federal Reserve, non-financial businesses’ debt has risen to a staggering $18.5 trillion.
While debt may increase, CFOs understand the need to innovate. Gartner research indicates that 82% of CFOs’ investments in digital technology are accelerating, exceeding investments in other areas such as talent, supply chain, business services, or fixed assets. In fact, more than 80% of CFOs are expected to increase their time-spend on advanced analytic technologies and tools that the finance function can use to provide more forward-looking and predictive insights to the business.
CFOs, whose responsibilities often extend beyond financials to those of Chief Operating Officer, have had to balance stability with growth amid changing workplace conditions, worker shortages, and supply chain nightmares. It is no surprise they are recognizing the necessity of adopting technology to increase efficiency, reduce costs, and optimize working capital. Being bogged down with manual processes is no longer an option.
Case in point: The pandemic highlighted the necessity for payments digitization to accelerate balance sheet improvement, with 71% of CFOs saying they have increased their use of digital payments since March 2020, according to a report from PYMNTS.com and Corcentric. As a result, 53% of CFOs say they send and receive fewer check payments and 87% say the same for cash. Digital payments by credit card have experienced the greatest growth in usage of any payment type.
However, fast-tracking payments digitization is not only about utilizing improved methods of financial transactions. CFOs who have decided to ditch manual processes know there are essential benefits to experience. The following seven reasons are the top business boons driving adoption of up-to-date payments technology:
- Greater operational efficiency. Eliminating paper and manual data entry reduces the risk of human error, freeing up workers’ time for other valuable tasks. It also helps streamline accounts payable and accounts receivable functions, which have historically operated in siloes.
- Comprehensive cash flow and working capital. When a business has more flexibility with financial settlement, everyone in the equation is happier: Suppliers will get paid faster, customers can take advantage of early payment discounts and rebates, and the business can have more accurate forecasting.
- Seamless operations integration. When transaction functions are automated, digitized, and integrated, procurement and finance teams can collaborate and clearly view ongoing cash flow. This real-time insight into cash flows can also help unlock funds for key business initiatives.
- Unified digital tools. Companies and vendors prefer working on the same system, which also has the benefit of increasing efficiency of transactions. Digitization helps improve the user experience, which can also serve as a key differentiator and selling point in business negotiations.
- Transparent processes. Vendor portals allow customers and suppliers to view transactions and invoice statuses in real time. This can help improve vital business relationships and communications, as well as foster trust and transparency.
- Enhanced security. Digitization enhances data security and fraud detection, helping keep valuable data and transactions secure. This is especially beneficial for businesses still cutting paper checks instead of using digital solutions. Information security is a major issue today, as companies are facing increased phishing and hacking attempts.
- Competitive advantage. Falling behind in implementing this technology increases the risk of losing business for the entire organization. Choosing not to innovate may lead to becoming obsolete, as embracing digital solutions offer many benefits not only for the business but for clients and suppliers, as well.
Despite wavering challenges, businesses can no longer coast on the topic of digital transformation. But the good news for CFOs and financial teams is that they can make a significant difference. According to the PYMNTS.com and Corcentric report, 91% of CFOs who implemented payments digitization improved efficiency, 62% reduced costs, and 61% experienced stronger data security.
That means organizations of all sizes and industries can find freed up time to continue embracing the right kind of change.
To learn more about how companies from a wide range of industries are using payments digitization to transform their operations, download the report.
At Corcentric, we stand ready to help. To learn how we can help, contact Corcentric today.