CFOs Say They’re Taking 3 Key Lessons Into New Year

This past year was one of accelerated change for the CFO office.

Businesses emerged from the COVID-19 pandemic, many of them bruised, only to be met with further macroeconomic crises including rising interest rates, historically high inflation, and growing logistical bottlenecks.

These economic realities saw businesses of all shapes and sizes adjust the metrics and key performance indicators (KPIs) that underpin their own performance, in many cases pivoting from a focus on growth to prioritizing profitability.

While 2023 will doubtless hold its own share of challenges, looking back on the biggest evolutions this year held for B2B payments can help organizational leaders prepare for the road ahead.

After all, great businesses are built during periods of transformative transition. Tough times never last, but smart businesses do.

Three overarching B2B payment trends have reached critical velocity over the past year: going digital, next-generation risk management, and alternative finance tools. They are likely to shape the B2B payment journey and the ongoing role of the CFO in the years ahead.

Losing the Paper

An object at rest stays at rest, unless it is acted on by an external force.

And until the pandemic brought with it a hyper-rapid digital transformation, it looked as though CFOs and accounts professionals would be content to juggle PDFs, paper checks, and repetitive manual processes even as the rest of the world moved increasingly online.

“Three years ago,” Global Head of Visa Business Solutions Darren Parslow told PYMNTS’ Karen Webster, “[going digital] was number six on the ‘top 5’ list.”

Now, CFOs show near unanimous (94%) support for prioritizing digital payment tools to maximize efficiency within their organizations.

Digital payment methods offer a number of benefits, including faster processing times, increased security and reduced costs. Their adoption in the B2B space is being driven by the growing expectation for a consumer-style payment experience from businesses, as digital tools continue to move the goalposts around speed and convenience within the more complex world of business transactions.

Digital payment tools and other innovative solutions also allow finance and accounting heads to add greater value to their organizations by helping other departments make faster, more relevant, data-driven decisions.

Still, while technology marches on and even begins its evolution toward mobile-based solutions, a divide is growing within markets where hard cash still dominates.

Risk Management

As the world goes digital, it is becoming more imperative than ever for businesses to bolster their risk management procedures and protect against next-generation scams and fraud.

Leveraging artificial intelligence (AI) tools and other next-generation approaches to risk management and fraud prevention can help provide businesses with a holistic approach to shoring up their internal vulnerabilities and help them fend off emergent, digital attacks.

Robust compliance controls around authentication should be a key focus for executives as they enter the new year, and compliance-related insights should also inform strategic direction around B2B payment decisions.

Bad actors will also be armed with advanced tools as they attempt to outsmart organizations, and it is mission critical for businesses to be prepared to safely, securely and successfully operate within today’s connected economy.

Working Capital Tools

Working capital is the oxygen that keeps enterprises healthy, especially in times of economic distress. Improving the flow of information, funds and relationships between buyers and suppliers is a burgeoning opportunity for innovation.

As the digital evolution marches on and economic headwinds continue to blow, businesses increasingly want to get their money right away. Real-time transfers are a necessity; waiting days for funds to arrive can hamstring operations.

PYMNTS’ research estimates that smaller firms are carrying more than a trillion dollars of outstanding receivables for larger suppliers, a situation that continually puts the resiliency of these businesses to the test.

Heading into 2023, the threat of a recession is becoming more pronounced and access to capital more important.

Alternative financing options, like buy now, pay later for business, are stepping up to provide companies with increased flexibility, helping CFOs manage their cash flow challenges more effectively with future-fit solutions.

All-in-one accounts payable software tools are also helping business leaders manage overhead and improve collections by consolidating systems and streamlining processes.

2022 was a transformative year for CFOs, no matter their industry. By learning and reflecting on the evolutions that took place, top business leaders can successfully enter the new year prepared to shape business outcomes, not just report business results.