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Findings from Conferma’s Growth Ignition Index Report which surveyed over 400 financial decision makers globally show that businesses are increasingly focused on payments as a core growth enabler. In fact, 57% of global businesses have invested in payments capabilities to a significant degree over the last five years, demonstrating a clear appetite for change.
More and more, business leaders are understanding the role of payments in supporting growth, innovation, and efficiency.
In this blog, we summarise some of the key benefits of implementing a payments-first business strategy, as discussed by Conferma CEO, Jason Lalor, in episode one of The Payments Insider Podcast.
Focus on core responsibilities
On average, employees dedicate over three hours each week to financial tasks. To put that into perspective, that’s almost seven days a year where employees are onboarding suppliers, tracking spending, and logging and reconciling expenses, instead of progressing their main priorities.
As summarised by Jason Lalor, Conferma CEO, “If [payments aren’t] your core job, that’s going to distract you from being brilliant at what your core job is.” Increasingly, CFOs want frictionless payment, rather than having employees dedicating substantial amounts of time to these repetitive tasks.
By implementing a payments-first strategy, employers can free up capacity for employees to focus on core responsibilities, maximising the value they bring to the business. Innovative payment technologies like virtual cards can also significantly reduce manual financial admin tasks as they eliminate the need for unnecessary supplier onboarding, allow payments to be automatically reconciled, and ensure policy and budget compliance through custom spending controls.
Improve operational efficiency
Automating and embedding payments can not only free up employee time, but also improve overall operational efficiency. With $110 trillion going through B2B payments each year, businesses have a huge volume of payments to manage and process, making finding the right strategy crucial.
Conferma’s Growth Ignition Index Report also found that operational efficiency was deemed the most significant hurdle to growth by finance leaders, highlighting the considerable opportunity that payments automation presents to businesses if implemented effectively.
Dave Wood, Chief Operations Officer at Conferma says, “The recurring use of automated solutions to improve the efficiency of the payments process shows how financial leaders recognise their teams are stretched thin over time consuming tasks. Examining these efficiency metrics closely not only reveals the exact challenges but the opportunities ripe for addressing. It’s clear that streamlined processes can save time for every employee, improve partner relationships and – on a far broader level – set businesses up for future success.”
Enable innovation
It naturally follows that a focused team is a more innovative one. When a business has an effective payments strategy in place, employees become empowered to focus more time on high-value transformation activities. The additional capacity employees reclaim when not burdened with repetitive financial admin can be redeployed to identifying opportunities for optimisation within their core role.
Digital transformation is high on the agenda for many businesses. The primary driver of investing in new technologies is to boost revenue, with financial leaders identifying digital transformation as the third largest component of business growth. With this in mind, ensuring employees have the time and resources needed to drive forward change initiatives becomes business critical.
We also know that there is a correlation between a business’ appetite for innovation and the success of these efforts. Conferma’s research found that 51% of companies adopting innovative payment methods such as virtual cards, have successfully implemented multiple digital transformation projects, further evidence of the benefits of investing in payments infrastructure.
Improve reconciliation
Reconciliation of business spend can be time-consuming and inefficient. With B2B spend only projected to increase over the next few years, there is mounting pressure on finance teams to improve and optimise reconciliation processes. By implementing a payments-first strategy that leverages the right payment method at the right time, businesses can significantly improve reconciliation times and visibility of overall spend.
Virtual cards offer businesses unparalleled benefits when it comes to payment reconciliation. As each card is created for a specific purpose, purchase data is automatically matched to payment data and can be viewed online in a single platform. This automated reconciliation, along with line-by-line breakdowns of enriched spend data, gives businesses complete visibility of their business expenses and can drive effective policy changes.
Encourage consistency
As well as the benefits to efficiency, innovation, and reconciliation, a clear payments strategy also allows for a consistent payments approach to be applied across departments.
With many different payment methods available to businesses, be that account to account, ACH payments, or cheque, many are left with a fragmented payments approach. Payments fragmentation can hinder a business in many ways, whether that’s by delaying cash flow, limiting visibility of total spend, or slowing reconciliation.
A payments-first business strategy encourages a consistent approach to payments based on payment type. By evaluating and defining payment risk, frequency, and value, businesses can adopt a framework that defines which payment method should be used and when, allowing teams to respond more quickly to payment requests.
As we have outlined, there are many benefits to a business adopting a payments-first strategy. By embracing innovative payment technologies such as virtual cards, businesses can not only improve efficiency, but also lay the foundations for accelerated growth. Hear more insights on the evolution of the payments industry in episode one of The Payments Insider Podcast.