Finance leaders consider new technology with blend of optimism and hard reality

Is the glass half-full or half-empty? For finance leaders and treasurers at corporate as well as financial institutions, it’s more than a trite question. Because when it comes to the technology necessary to answer it accurately, Bottomline has found that a mix of optimism and realism is needed. So half-full? Half-empty? Spoiler alert: We will answer the question at the end of this piece. 

First, let’s consider the optimistic side of this equation. Technology has improved the visibility into current cash positioning as well as the ability to forecast it. According to a recent global research project we completed with CFO.com, nine out of ten CFOs (90%) rate their companies’ current view across cash as either “excellent” or “good.” When asked if that view was integrated across the company, CFOs assigned similar scores. 

Now, how does technology fit here? It should center around cash management and payments solution, and that includes giving visibility into current cash positioning. If a CFO is happy with cash positioning, odds are that a simple, automated cash management solution is at the heart of that optimism. All of which begs another question: What makes a good cash management solution? 

We would argue that automation is at the heart of it. State-of-the-art cash management will automate payments across multiple banks, multiple bank accounts, payment systems and networks via a single SaaS-based solution. That’s not to say that there aren’t some finer points in the middle of that optimal solution. A modular approach can also manage different types of payments that fit the unique profile of the company. For example, if a company still uses paper checks, a solution called “Check Production and Lifecycle Management” provides centralized control of print requests and issuance files for checks regardless of whether they originate centrally and at remote sites. Other modules can be customized to fit ACH, international payments and wire transfers. And let’s not forget that the optimal payments and cash management solution will automate reporting. It should provide real-time reporting of all current transactions regardless of the network or payment type.

However, (get ready for glass half-empty) the CFO project also uncovered some urgent and unmet needs for treasurers and CFOs (read: realism). When introducing the concept of liquidity, the responses change. For example, 80% of respondents to the CFO.com survey said they needed “a more complete vision of business cash and liquidity.” So, while CFOs are optimistic about their view of current cash positions, they understand the job is incomplete, or could be more thorough. To forecast cash correctly and in the critical context of liquidity, they need more data with the ability to analyze it effectively. 

The need for that data brings in another technology solution connected to cash management and that’s the payments hub. Put simply, if your data is spread out among different silos or even manual processes, cash forecasting is almost impossible, especially in times where the future is unsettled as it is these days. Picture the payments hub as software that works in tandem with the cash management solution. The payments hub can be data central, removing the need for logging into multiple banking portals to initiate payments and check status for payments. It also automates the process, eliminating the need for porting data from ERPs to combine it with other spreadsheets, and then repeat the process of logging into multiple portals. The right payments hub makes forecasting an achievable goal with accurate results.

There is one relative newcomer to the cash management discussion and that’s real-time payments. The CFO project found that 80% of finance leaders say they need better access to real-time payment data, analytics and insights. Real-time payments and settlements will become more important as the high-speed rails gain traction with businesses and consumers. And they will of course influence liquidity, which is at the core of any CFO or treasurer job description. 

The CFO survey showed more information needed, and here’s where we return to the optimistic point of view, and we have the proof. Bottomline also conducted an independent global sweep of financial institution executives in December 2022 that showed, in general, the industry is right where it needs to be from a liquidity perspective, focusing on real-time or instant payments. (The semantics depend on your geography). When asked to rate their top priorities over the next year, 53% said real-time payments, with 31% adding improved cash forecasting and liquidity management. That’s a dramatic reversal from our 2021 survey that put creating new revenue streams at the top of the list. 

We said we would answer the question. All in all, we’re seeing a glass that’s half-full. More importantly, we’re seeing a way to fill that glass to overflowing. SaaS-based technology has brought the ability to improve cash management and visibility to most, if not every, company regardless of vertical, budget or internal product roadmap.