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The Role of Payments Modernization in Enhancing Cash Flow

Recent findings reveal that a significant portion of finance leaders in the U.S. and Canada, nearly 72%, view the modernization of payment processes as a critical strategy to address ongoing cash flow challenges. Despite this awareness, a mere 21% have reported having a robust and efficient payments infrastructure in place. This discrepancy highlights a significant barrier faced by many organizations as they tackle rising operational costs, inflation, and the complexities of today’s economic environment.

The Widespread Impact of Outdated Payment Systems

Outdated payment systems combined with manual financial processes contribute to crucial delays in collections, limit visibility into cash flow, and increase the pressure on working capital. The lack of automation in these processes prevents finance teams from effectively analyzing payment data, thus reducing their capacity to identify risks and enhance overall business decisions.

Brent Coles, the CFO of Fortis, emphasizes that increased automation offers a significant opportunity for financial departments to contribute more strategically to their organizations. By dedicating less time to manual tasks and focusing instead on data analysis, finance teams can facilitate timely decision-making regarding pricing, investments, and growth opportunities—transforming the role of the CFO into a more proactive partnership within the business landscape.

The Signal The B2B Finance Report Findings

This perspective is supported by findings from the Signal The B2B Finance Report, which surveyed 100 finance leaders from small to mid-sized enterprises (SMEs) across North America. Conducted in partnership with Avalara and Traild, the report highlights the challenges finance leaders encounter in terms of cash flow, payment operations, and adapting to a complicated business environment.

Key insights from the report include:

• - Cash Flow Challenges: 61% of respondents identify a high Days Sales Outstanding (DSO) as a primary issue affecting working capital, and 59% express concerns over a lack of real-time cash visibility.
• - Benefits of Integrated Financial Systems: Organizations with more interconnected financial frameworks tend to experience improved invoice accuracy, reduced average DSO, and leverage payment data more effectively for strategic decision-making. These businesses are more likely to be regarded as vital partners in growth by their CEOs and boards.
• - Barriers to Automation: A substantial 75% of respondents cite integration difficulties with existing systems as a die-hard obstacle to adopting automation, while 64% mention a tendency to stick to current processes despite their inefficiencies.

Consequences of Inefficient Processes

The inefficiencies stemming from outdated financial processes often have a direct impact on cash flow. Delays or inaccuracies in invoicing can slow down collections, create unnecessary administrative work, and prolong the period before businesses receive payments. Streamlining the invoice creation process and enhancing the accuracy of financial data can significantly alleviate these challenges. For instance, artificial intelligence offers promising avenues for addressing the complexities of these processes and driving further efficiencies.

Coles pointed out that a lack of timely and correct invoicing is only part of the high DSO equation; the internal processes within companies frequently cause payment delays. Manual reconciliation and payment matching can lead to cash flow discrepancies. By automating these functions and enhancing invoice accuracy, finance teams are better positioned to secure faster collections, gain a clearer understanding of available cash, and unlock working capital that has already been earned.

Looking Ahead

As finance leaders strategize for 2027 and beyond, the research underscores the importance of investing in the necessary infrastructure and processes to modernize financial operations. This modernization is essential not only for improving cash flow but also for elevating the CFO's role to one that shapes strategic technology investments and decisions pivotal for business growth and long-term competitiveness.

To explore the full findings of the Signal The B2B Finance Report, visit Fortis’s official website.

About Fortis

Fortis stands out as a leader in embedded payments tailored for software providers and ERP systems, processing billions in transactions annually through proprietary technology. Headquartered in Plano, Texas, Fortis is committed to delivering seamless commerce experiences that integrate various payment workflows, helping businesses find new avenues for growth. Learn more at www.fortispay.com.