CFO's: Now is the Time to Rethink Your Payment Model


When old methods no longer suit a business, new methods are typically put into action to resolve issues and increase overall ease. In most cases, old methods are replaced with more current technology which automates these old, outdated methods to run smoother and more efficiently. In other words, automation technology can be used to drastically reduce human error and speed up the overall process.


Due to current events, chief financial officers (CFOs) for small-to-medium-sized businesses (SMB), have seen a common issue arise throughout all sectors of retail. It has recently come to light to SMB CFOs that the way of handling B2B payments for accounts receivables is no longer suitable for several reasons.Because of this, 92% of SMBs in the United States currently working to digitize their accounting functions and another 47% are looking toward digitizing their payments processing.


Digitizing accounting functions and payments processing is one way that SMB CFOs can implement current technology to automate certain aspects of their responsibilities. SMB CFOs are rethinking their payment model for B2B payments and here are a few reasons why:

Lower Costs, Faster Service

Many SMBs offer multiple payment methods to their customers. Between cheques, SWIFT transfers, credit card payments, SEPA, and/or ACH transfers, SMB CFOs are left to manage these payments with their account receivable team. This task can be time-consuming and highly susceptible to human error. When it comes to a business's finances, small errors in numbers can have major negative effects that can be hard to correct.


Despite the growing preference for using SEPA transfers and other electronic forms of payments, cheques are still regarded as the preferred method of payment by buyers. Cheques pose numerous hurdles to SMBs and steps should be taken to limit this form of payment due to these reasons:


High Processing Costs- Processing a cheque costs money and it’s an added expense that the receiving business is responsible for paying. These processing fees aren’t part of the sale price and they vary depending on the bank that is processing the cheque. Over time, these fees add up to drastic numbers. On average, businesses can spend an extra $30,000 to process 20,000 cheques. This makes processing checks 5 times more expensive than ACH or SEPA transactions and eats away at profits that could be used to grow the business.


Slow Processing Speed- Not only can processing cheques become expensive, but they take a long time to process. Typical turnaround times between receiving a check and the funds entering the business's bank account can be anywhere between 5-7 days. This can be detrimental to any SMB as suppliers end up having to support longer credit terms than anticipated.


Higher Chances of Human Error- Checks are a form of paper payment where information is written by hand. Despite up-and-coming technology that allows checks to be scanned directly from a mobile device into a bank account, not every bank offers that service. CFOs are often required to input cheque information by hand, which is not only time-consuming but increases the chances of human error. A single digit is capable of disrupting the process and delaying it even further.


Digitizing payments can reduce processing times and costs and decrease the human error aspect that comes with the payment model that SMBs are currently using.


Shorter Cash-to-Cash Cycle

A business's “cash-to-cash” cycle is the time it takes between the purchase of materials from a supplier and the payment collection for the sale of the finished product. Any business should strive to keep this cycle as short as possible as this increases the frequency of revenue coming into the business thus increasing cash flow. A slow cash-to-cash cycle can lead a business to operational challenges and liquidity risks.


Digitization can help with sending and receiving payments and keeping track of payments between suppliers and the business, thus reducing the length of the cash-to-cash cycle by speeding up the overall process.


Higher Customer Satisfaction

There’s no doubt that recent world events have led to an uptick in eCommerce and online spending. Just this alone has increased the use of digital forms of payment as checks are not a suitable form of payment when purchasing from an online store. By offering more forms of digitized payment, such as debit cards, credit cards, bank transfers, and even digital wallets, customer satisfaction is sure to rise. 


Offering customers multiple digitized payment options not only benefits the customer but the SMB as well. Customers are given greater flexibility, the ability to pay on their own without additional assistance, and fewer fees to pay outside of the product cost. In return, SMBs receive happier customers who are more likely to return and give their loyalty to the company. This mutually benefitting relationship has the potential to increase revenue and decrease the troubles that come from not digitizing payments.


Reduced Fraud Risks

There are multiple ways that fraud can occur in an SMB. In fact, any business can become a victim of fraud through credit cards, checks, internal affairs, emails, 3rd party skimming, and many other methods. Among all these, fraud that occurs through cheques is amongst the highest and most preferred methods for scammers.


The most common form of cheque fraud includes counterfeit cheques and forged signatures. In 2018, cheque fraud accounted for 47% of industry losses ($1.3 billion) and for 60% of fraud attempts against a deposit account.

Though digitization of payments has its fraud risks associated with it, there are more ways to protect an SMB from those kinds of fraud attempts. By opting to digitize an SMB’s payment model, potential losses and fraud attempts are capable of being greatly reduced thus saving a company millions of dollars.


Digitizing your SMB’s payment model has numerous advantages that should be taken into consideration when deciding whether or not to go through with the process. The digitization of SMB’s CFO responsibilities can lessen a variety of burdens on the individual as well as the company as a whole. The technology to digitize payments exists and is constantly evolving to make things easier, faster, and more reliable for everyone involved. By using this technology, CFOs can comfortably take a step back from their overbearing position and allow the digitization of payments to decrease human error while improving customer experience and overall revenue.


To ensure this process is done correctly, SMBs should hire companies that specialize in the digitization of payments and other financial services. Companies like Fyroin do just that. Fyorin is a global company that helps businesses of all sizes digitize their services. Fyorin can help make services swift, flexible, and frictionless for all your customers to enjoy no matter what part of the world they may be in. They offer a payments and financial operations platform where you can benefit from tailored financial products for your business across a curated network of financial providers. These financial products range from dedicated multi-currency accounts and corporate virtual cards to better control your online spending. It also provides the ability to execute a single mass payment for all your client's payouts and provides you with flexible and unified reporting mechanisms.


As you can see, there is good reason for Fyorin priding itself on being the payments and financial operations platform for all your business banking needs. Though some of its services were listed above, Fyorin still has more services to offer. Check out their services and place your trust in them today to optimize your business and provide all the solutions you may ever need!

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