CFOs Leaving Legacy Process In Their Digital Dust

We discover a basic truth upon reading PYMNTS November 2020 CFO’s Guide To Digitizing B2B Payments done in collaboration with Comdata: many treasury operations need digital triage.

“Companies shifting to digital payment methods are overcoming many of the challenges that have historically plagued business-to-business (B2B) transactions. B2B invoices generally take 37.4 days to settle — a sharp contrast to the real-time payments that have become ubiquitous in everyday life through apps such as Venmo or Zelle,” the CFO’s Guide states. “This slow pace is largely due to the business world’s lingering reliance on paper-based payment methods, with some experts estimating that 40 percent of the $25 trillion in B2B payments made annually in the U.S. are still conducted with checks.”

That’s all changing at the speed of digital as corporates retool legacy systems with integrations that supercharge tech stacks and enable treasury operations to transform fast and effectively.

APIs Fostering Connectedness

As the new CFO’s Guide states, “The strains of operating during the pandemic are prompting companies to modernize their AP and AR processes to ensure timely payments.” Increasingly that entails the use of application program interfaces (APIs) and the connections they make.

Kim Vodicka, vice president of commercial operations at Dell Financial Services, a division of Dell Technologies that provides financing solutions to businesses’ corporate and consumer clients, told PYMNTS, “APIs are becoming a very common request in the payment space. The more information and flexibility we can provide the customer about their assets and amounts due, the more able our customers are to make on-time, accurate payments.”

APIs and accounts payable (AP)/accounts receivable (AR) automation are revving up the speed of money and financial data to a pace more in line with pandemic-era market demands. It’s making a major difference.

“Real-time payments are advancing … quickly in the U.S., with more than 140 American banks implementing such payments so far this year — an increase of more than 500 percent since September 2019. This suggests that the COVID-19 pandemic is playing a key role in driving this trend, as handling paper checks can be for bank and accounting staff working from home.”

Corporate Treasury Needs More Love

Advancing real-time schemes and back-office financial automation are helping corporates reengineer treasury for remote work and other factors it treasury wasn’t designed for.

“Businesses are facing challenges in processing payments during the pandemic as they transfer their operations to staff members who are working from home. Many firms are turning to AP automation, which allows accounting staff to leverage artificial intelligence (AI) algorithms rather than manually examine invoices and purchase orders,” per the guide.

AP professionals in one recent survey predicted 20 percent greater investments in AP automation technology to accelerate returns and reduce risks during the health crisis. “Such solutions, including automation systems that can process invoices automatically and upload receipts to the cloud for remote viewing, are especially effective for remote workers who may be unable to access accounting software and documents at their offices.”

Be this as it may, treasury modernization is a game of inches, as the Guide also notes that “Less than one-third of all accounting departments have deployed automation technologies, despite the fact that they could save an organization with 40 full-time treasury professionals more than $878,000 per year. Departments are working fast to fix this, however, with 88 percent of respondents saying they plan to deploy automations by 2021,” the guide states.