4 Ways CFOs and Treasurers Can Monetize Payments Beyond Cost

Innovation begets innovation — and companies that neglect that fact can often end up stagnating.

Consider, for example, the fact that in today’s digital economy, payments are no longer just a means of settling invoices — they’re emerging as strategic tools for generating revenue. Digital and automated business-to-business (B2B) payments, though still maturing, offer rich ground for businesses seeking to create new revenue streams or enhance existing ones.

Industry executives PYMNTS has been speaking to for the monthlong event, B2B Payments: Outlook 2030, all agree on one thing: Finance leaders can move beyond traditional cost savings and extract more value from payments as an engine for growth.

The catch? It’s nearly impossible to do so with a legacy and manually driven back office.

For one, modernizing payment infrastructure is essential to unlock revenue from dynamic discounting and payment incentives.

Secondly, digital processes create more payment data which, when properly harnessed, can create new revenue streams and strategic insights.

Third, embracing automation across accounts receivable (AR) and accounts payable (AP) functions can help foster stronger B2B relationships that generate long-term financial value.

And finally, without an automated payment infrastructure, it becomes challenging to manage innovations like virtual card transactions, which offer a practical way to earn rebates and enhance liquidity management, at scale.

While the opportunities for unlocking payments may be vast, they ultimately require modern infrastructure to materialize.

Read more: B2B Card Payments Usher in New Era of Supplier Enablement

Value Extraction

For CFOs and treasurers, integrating a modernized, automated payment system is essential for success. Finance leaders who once focused on reducing payment costs are now embracing approaches that unlock growth and monetize payment processes.

“With traditional systems, you’re always a step behind,” Eliot Buchanan, president of Priority Tech Ventures, told PYMNTS. “Real-time payments mean you can get paid faster — on Wednesday instead of Friday — which could be the difference between making payroll and taking out a line of credit.”

“Time is the biggest currency a business has,” he added.

With automated payments, companies gain greater control and transparency over payables, allowing finance teams to time payments strategically to maximize discounts.

The PYMNTS Intelligence report, “Embedding Transformation: Solving Critical AP Challenges With Embedded Payments,” done in collaboration with Finexio, finds that 64% of small and mid-sized businesses (SMBs) face delayed payments, and underscores the need for businesses to rethink their payment processes and consider solutions that integrate into their existing systems.

For example, embedded payment platforms with artificial intelligence (AI) capabilities can optimize cash flow forecasting, ensuring funds are deployed efficiently for early payments without affecting working capital needs.

Read more: Tech Sector Cash Flows Hampered by Keeping Treasurers in the Dark

Breaking Down Siloes

As PYMNTS has covered, traditional methods of cash management often involve fragmented systems, where financial data exists across multiple platforms. This fragmentation can lead to inaccuracies, delays and inefficiencies — problems that an integrated system can resolve by centralizing all financial transactions into one place.

“The most underappreciated part of any one of these finance organizations is the controller’s office and the back end of treasury, where they need to be able to take in reporting at the end of every day, be able to close the books in two or three days at the end of a month,” Cindy Turner, chief product officer at Worldpay, told PYMNTS.

Separately, Alexander Knothe, head of client solution and partner management at Deutsche Bank, told PYMNTS that treasury organizations are “pushing for higher levels of automation” to manage payments and financial data with minimal intervention, adding that the integration of advanced payment tools directly into enterprise resource planning (ERP) systems has been key in enhancing payment tracking, reconciliation and reporting.

Payments generate a wealth of transaction data, providing insights into customer behavior, supplier relationships and market trends. Finance teams can use this data to create new revenue opportunities, such as offering insights-as-a-service or enhancing business partnerships.

But payment data from legacy systems is often fragmented and difficult to analyze at scale. An integrated payments infrastructure allows for real-time data visibility, making it easier to spot trends and insights.

Automating payment processes reduces costs and lays the foundation for revenue generation from early payment discounts, data monetization, virtual card incentives and stronger supplier relationships.

Register now to access all streaming and on-demand videos from the B2B Payments 2024 event series.