CFOs Look Back on 2022 as the Year of Digital Transformation

CFO, treasurer, digitization, automation, B2B payments

For scores of CFOs, 2022 may go down as the year where they zeroed in on “what really matters” — including digital transformation.

Amidst the turbulence of the last couple of years and the broader stirrings of macroeconomic pressures today, financial leaders used the past year to take a hard look at their processes and make key decisions around how to improve them.

Across numerous, far-ranging discussions with finance leaders from an array of industries and geographies, PYMNTS found three key and consistent strategies stood out the most.

Prioritizing Digital Evolution

The ongoing digital transformation has revolutionized the capabilities of the CFO office, as well as brought with it a new era of responsibilities and hiccups.

If a business is running its accounts payable (AP) and accounts receivable (AR) operations using spreadsheets, manual processes, and legacy workarounds, it’s going to be difficult to build and scale.

“We’re really focused on finding systems from the front end all the way to the back end that plug into each other,” Justin McMahan, CFO at Abra, told PYMNTS. “We’re trying to stay as unsiloed as possible when it comes to systems.”

Many small businesses are still using legacy tools that don’t have software capabilities built around them, making it difficult to adapt to the evolving realities of the landscape.

“In every environment, you should always be looking for how do we get rid of that spreadsheet, how do we improve that experience, how do we save money, how do we get paid faster?” Ingo Money’s Drew Edwards told PYMNTS. “This innovation that maybe has been started by the pandemic — I’d just love to see it be the norm going forward. There’s still a lot of work to be done with digital automation of AP and AR around smaller billers.”

SpotOn CFO Lisa Banks told PYMNTS that she believes the software built around transactions is where “you get the stickiness and value… there’s just a massive tech replacement that’s happening right now and it’s important to stay at the forefront. If you’re able to boost your revenue, improve your customers’ experiences — that means they’re coming back for more and you’re more profitable.”

Automation, Automation, Automation

If you didn’t guess, the second key focus for CFOs in 2022 that we heard often centered around automation — in all of its forms.  There has been an explosion of opportunity for next-generation automated tools to help CFOs drive sustainable business growth while avoiding human error pitfalls and reducing manual labor redundancy.

Transflo CFO Cameron Eastman said to PYMNTS earlier this year that he and other CFOs are excited about leveraging tools to make their back offices as automated as possible, as it “gives a lot more certainty over what your spend will be.”

AP/AR systems that automate operational functions can help CFOs optimize cash flow more easily by allowing for greater, more accurate visibility, as well as help solve for scalability issues. Automatic reminders and workflows can ensure that nothing gets overlooked and help optimize and consolidate existing processes.

“The answer lies not with throwing more people at the problem, but in throwing machines at the AP pain points themselves,” OpenEnvoy’s Matt Tillman told PYMNTs.

Smart CFOs have seen first-hand the importance that operations visibility and the value of automation can bring to business performance. According to recent PYMNTS research, CFOs are now looking for comprehensive AP/AR solutions that integrate payments processing with invoicing management.

Beefed-Up Risk and Fraud Controls

The digital transformation sweeping the marketplace has brought with it a whole new host of next-generation risks that CFOs need to be proactively aware of, making sure the right controls and appropriate technology are in place to prevent their occurrence.

“As the traditional network perimeter organizations have relied on has eroded, there has been a staggering rise in security threats,” Brett Tighe, chief financial officer at Okta, told PYMNTS. 

According to Alloy CFO Kiran Hebbar, “The first thing to convince [customers] going digital was that going digital doesn’t necessarily mean opening the spigot and getting more fraud. That was a bit scary for some.”

Nearly half (48%) of CFOs say their investments in fraud and risk management systems were primarily designed to help maintain business operations amid the COVID-19 pandemic.

As work continues to be done digitally and services continue to be provided via the cloud, protecting against digitally native scammers and bad actors has become increasingly important.

As far a what’s next for 2023, the conventional wisdom among of recurring stream of CFOs guests is projecting a continuation of the current belt-tightening, cash-prioritizing ethos that has dominated 2022.  In short, CFOs tell PYMNTS they’re looking forward to more data-rich and tech-based solutions that offer more seamless and integrated products to tackle the key pain points in the industry as the digital revolution carries on.