The Digital Tipping Point: Why Should Mid-Market CFOs Invest in Finance Automation in 2023

Introduction

With inflation on the rise and a recession on the horizon, the present economic environment is one of the most challenging in recent memory. To tackle this challenge, most businesses are likely to look at cost-cutting measures. According to HighRadius’ The State of CFO’s Office report, cost optimization is the biggest priority for mid-market CFOs in 2022.

As a first step to improving your cash flow, CFOs need to evaluate to what extent their current business operations are driven by manual, time-consuming, and error-prone workflows. These manual operations can become a tipping point that may lead to slower revenue collection and increasing employee workload.

Bringing digital transformation to the table

Digital-first CFOs are focused on continuously improving their business processes by enabling automation for finance operations.

Digital tools aren’t just for big-time corporations anymore. Mid-market businesses face at least as much pressure to innovate and modernize as enterprises. Investing in your finance teams pays off, but what processes to prioritize for modernization can be a little tricky.

To help guide the way, this blog lays out three best practices to maximize the efficiency of your order-to-cash (O2C), treasury, and accounting processes —and the time to act on them is now.

Priority #1: Transform data into actionable insights with analytics and forecasting

In 2022, companies made seismic shifts in how they did business as economic uncertainty impacted finance management and workplace dynamics, virtually overnight.

To keep up in a pivot-quickly world, mid-market companies need analytics tools that give them instant access to insights and predictive analysis so that they can optimize the entire O2C and treasury process.

Looking beyond antiquated spreadsheet systems

Spreadsheets have dominated finance departments for four decades now and continue to remain so. Although finance teams, including chief financial officers, have become accustomed to using Excel, its inefficiencies have become barriers to the growth of businesses.

Challenges of using spreadsheets

1. Inadequate analytics features for financial planning and forecasting
2. Limited options to mine actionable insights from large datasets
3. Difficult to collaborate across various spreadsheets
4. Inefficient in managing large volumes of data
5. Highly labor-intensive

Change can be hard, especially for finance teams. Still, for a company to grow, CFOs must enable digital upstarts to transition from legacy models to delivering single interface solutions with easy access to data, leading to businesses-impacting insights.

With real-time and historical analytics built within their O2C and treasury solution, finance teams can predict variances and forecast cash flow growth. It enables them to tackle current business challenges as well as prepare their organization for the future.

Access to custom dashboards and reports also allows them to collaborate and examine key industry metrics.

Priority #2: Align your teams and technology around what matters most—the customer

Mid-market finance teams have limited resources, and many were already feeling spread thin when it comes to keeping up with customer demands.

In fact, 41.2% of mid-market CFOs are looking for new ways to engage and build long-term relationships with customers—with the fear of a competitor providing a better customer service experience.

80% of customers are likely to go to a competitor after more than one bad customer service experience

Good customer experience (CX) and long-term sustainable receivables management are like peanut butter and jelly: they’re intimately linked, yet can get overwhelming for analysts.

Equipping teams with the right tools to engage with customers is crucial to improving customer relationships and enabling a business to grow rapidly.

Tune in on any payment mix

Customers shouldn’t have to climb a ladder to make a payment in their preferred format. They must be provided with convenient payment options at their fingertips so that they can make the payment as soon as they are ready.

33.3% of midmarket CFOs believe that the lack of payment options is among the top challenges hindering a company’s growth.

“Inability to process newer payment formats could direct your prospects to your competitors”

Adopting a solution that enables payment methods like ACH, credit and debit cards, and wire and bank transfers, to begin with, is a win-win situation for the business and the customers.

Businesses can continue to scale up their customer portfolio while enabling easier customer interactions with more payment options.

In fact, in our digital-first world, providing customers with a self-service portal enables customers to pay and manage their transactions themselves.

Personalize CX with a unified customer view

Providing customers with their preferred payment method is only one part of encouraging long-term loyalty. Your customers should all feel like VIPs—but when all of their data is spread throughout multiple systems, collecting efficiently while keeping them engaged will be tough.

Finance automation solutions enable you to integrate all your data into one centralized place.

With all the relevant customer data stored in a single repository, your teams can personalize and cater to accounts that require their attention while automating communications for low-hanging fruits.

This enables teams to eliminate manual tasks, reduce errors, and make finance processes more efficient while driving better customer experiences.

Priority #3: Empower teams with automation that promotes efficiency and collaboration

Your finance teams are the engine that powers your business’s cash flow —and more customers mean it’s time to scale with their evolving needs with the right set of tools.

As your order-to-cash and treasury operations grow, it’s crucial to remain agile and quick.

In order to scale, companies, especially smaller ones, should invest in financial tools that enable cross-departmental and team collaboration.

Our State of CFO’s Office report revealed that 61.2% of analysts need a supportive environment and the ability to collaborate to scale their day-to-day finance operations.

1. She will share an online credit application that captures all the relevant company data and bank and trade reference contacts.
2. The solution will then automatically prompt Tara to begin the verification process by collaborating with the referred contact for validation in a single view.
3. Once verified, Tara can evaluate the suggested credit limit and scores based on 100s of configurable industry rules and best practices.
4. After fixating on the credit score and limit, she can escalate the request to the respective stakeholders for approval with all the relevant account data stored within the solution.
5. The stakeholders approve the request and Tara can successfully onboard a new client. Now, the solution will automatically monitor and track the credit risk in real-time to check for variances and update reports across O2C and treasury for a 360-degree view of her company’s cash flow.

Which side of the tipping point is your business on?

Finance teams have a reputation for being slow to change. But one thing has remained constant through the decades— cash is king.

Pushing analysts from problem solvers to revenue drivers and improving the accuracy of cash forecasting are the keys to maximizing cash flow in the next normal.

Businesses can’t choose just one while putting the other off until later if they are pushing for growth. Both are critical for sustainable cash flow and long-term customer loyalty —and being successful at one without investing in the other is actually quite difficult.

How HighRadius Helps

HighRadius provides the complete finance automation solutions for order-to-cash, treasury, and accounting functions. Our solutions will empower your finance teams and enable your businesses to scale. Learn more about how HighRadius can help ensure you’re on the right side of the digital tipping point.

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