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Going Digital is ‘Harder than Checks’ But Essential for CFOs

There’s an old saying that “change is hard” because people are reluctant to explore new ways of doing things — especially when it involves years- and decades-long practices.

Yet, change is inevitable, and refusing to move with the times, particularly in business, can be too big of a risk to take.

In the chief financial officer (CFO) world, that difficult change involves shifting from checks to electronic payments, a painful process that many are still struggling to come to terms with.

According to Craig O’Neill, CEO of cloud-based invoice-to-cash solution provider Versapay, clients have admitted to twisting their customers’ arms to pay by checks, which they are more familiar with, instead of electronic payments that come with no remittance data and can involve high-level security risks.

He told PYMNTS that Versapay’s clients are right to be cautious because going electronic or digital “is actually harder than checks.” It’s one of the reasons why invoice-related payments that happen after-the-fact are much more complicated than payments at the time of the order, as the accounts receivable (AR) and accounts payable (AP) associated with them can further complicate matters.

But addressing these invoice-related payments that happen after-the-fact can create the biggest impact in B2B payments and “crack open tremendous payment volumes,” he noted, and CFOs are being forced to adapt.

He said the virtual world we’ve been forced into has advanced their thinking “by about 10 years in the span of 20 months,” and they’re realizing that it’s time to leave manual, paper-intensive AP and AR services behind and do business in the digital way preferred by the customer.

CFOs as the ‘Amazon’ of Businesses

CFOs who are advanced in their thinking cannot all be placed on one scale, O’Neill said.

Referring to a three-level maturity model that Gartner has created, he said professionals at the bottom are CFOs who focus on point solutions, while those at the second level assess the entire end-to-end process, from the inception of an invoice through to collections, payment reconciliation and settling cash in the bank.

The most mature level revolves around customer experience and collaboration, and how that connection can be used to solve problems and help cash flow more smoothly, he explained.

So, where a CFO lands on that spectrum will determine how eager the person is to become the “Amazon for our businesses” — as one CFO put it — making it easy for customers to transact with them online, while offering them the possibility to instantly connect with someone live if needed.

And even though the intent to reach the highest level of maturity is there, O’Neill said more work needs to be done to pull up those stuck at the first two stages.

Adapting to Today’s Digital World

According to O’Neill, CFOs have no choice but to adapt to today’s world, allowing their customers to pay how they want to pay, whether it’s by check, in-person, via ACH or a virtual credit card.

He acknowledged that leaving that much power in the hands of consumers in terms of choice and flexibility triggers a “deer in the headlights” type of fear in CFOs who are struggling to understand how they can scale and run an efficient operation, and at the same time give customers that level of freedom and power.

For those who manage to overcome that daunting feeling, Versapay is there to help them digitize their accounting functions and create better customer and vendor experiences.

The Toronto-based company is focused on transforming AR efficiencies, and through the Versapay Network, billing and payments are simplified for buyers and sellers to reduce costs as well as eliminate manual business processes.

O’Neill said the results speak for themselves looking at the roughly 700,000 businesses in the U.S. that are using Versapay to pay their suppliers today.

“They want that convenience, [and] they want an online experience, and I think CFOs are learning that pretty quick,” he said.

A study conducted by PYMNTS in partnership with Versapay revealed that CFOs who have been at the job for a decade or more are greater advocates for digital transformation of business payments and more motivated to change than younger ones who’ve been in the seat less time.

Read more: More CFOs Using Digital Transformation to Increase Customer Lifetime Value

O’Neill said a possible explanation for that unexpected finding is that younger CFOs are heavily focused on solving urgent issues around AR, billing, collections and receiving payments in the early days of work, while more seasoned CFOs who have lived the pain longer are desperate for opportunities to improve the business.

And improving the business in today’s digital world should be treated as an “urgent issue,” he stressed, because suppliers risk losing their business and customers to their competitors if they don’t provide that required online experience and convenience that consumers desire.

With the emergence of an increasing number of CFOs starting to think about customer experience, O’Neill said the much-needed change is coming, driven by the pandemic-induced digital shift in business processes.

He said Versapay is now getting questions not just around improving customer experience but also connecting with large customers in addition to small- and medium-sized customers.

Help Is Available

As businesses move forward, these problems need to be solved to crack business payments wide open and to turn them digital and away from checks altogether, he said. Versapay and other expert solutions are available to help.

O’Neill said CFOs shouldn’t think of point solutions (bottom level on the maturity scale) but rather focus on the customer and work their way backward.

“If you can find a way to connect with your customer, make it easy and flexible for them and deploy technology that supports that, you can really get outsized results,” he said.

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