Three-Quarters of CFOs View Economic Uncertainty as Top Challenge

These are trying times for many chief financial officers (CFOs) and other financial professionals, as unpredictable economic impacts have greatly complicated the task of managing cash flow and working capital.

Uncertainty weighs heavily on these CFOs and treasurers who are responsible for making sure companies have liquidity for meeting daily obligations and the working capital for responding to changing business challenges and opportunities.

It isn’t surprising that corporate leaders say uncertainty is a top challenge. The “Corporate Cash Management Playbook,” a PYMNTS collaboration with Red Hat, Infosys Finacle and Intel, reported that 79% of executives considered the pandemic and related uncertainty to be a challenge and that 73% said the same of overall economic uncertainty.

Get the report: Corporate Cash Management Playbook

In the current economy, companies must be able to maneuver quickly to find new suppliers that may require payment upfront, and their own customers may be seeking greater flexibility about when and how they pay. They must also be able to find new ways to market and distribute their products and services that require digital and cross-border payment capabilities.

Seeking Real-Time Visibility Into Cash Positions

Finance executives have been accustomed to relying on static predictive variables such as past-quarter performance and seasonal economic factors that fall short of providing real-time insight into their cash positions.

Read more: 72% of Treasurers Still Do Cash Flow Forecasts Manually

The pandemic shed light on the pitfalls of using such static models. Set-it-and-forget-it strategies simply don’t work. CFOs and corporate treasurers now must contend with a wide range of dynamic conditions and possibilities, such as a trusted supplier going out of business or international freight companies raising their rates drastically.

Companies of all stripes are coming to recognize that they can no longer afford to defer investments in cash management technologies. More than two-thirds of treasury officials plan to increase their investment in digital technology in such areas as real-time treasury, artificial intelligence (AI)-assisted security and predictive analytics.

Bringing Bank-Level Operations to the C-Suite

Recent advances in cloud computing and application programming interfaces (APIs) have given rise to a new generation of financial management tools that can effectively leapfrog over daunting technical hurdles. These innovations can help keep funds flowing even when finance teams are working remotely — and bring new levels of visibility and control over corporate funds.

These tools allow corporations to manage multiple payment flows from wide-ranging sources, including digital sales channels. They can enable real-time payment and cross-border transactions while mitigating foreign exchange (FX) risks. Payment security is also a vital component of digital cash management solutions, with companies deploying AI and other advanced machine learning (ML) to detect and counter fraud threats.

Leading technology providers offer these services not as stand-alone applications but as holistic systems that can be easily integrated into enterprise resource planning (ERP) software.

In a time of uncertainty, CFOs and other financial decision-makers need real-time visibility and control over a growing array of bank accounts — and they need powerful tools that can help them make projections. These innovations in cloud computing and APIs have the potential to bring bank-level operations to the C-suite and enable real-time forecasting that outperforms static models.