For most of its history, payments data has been primarily paper-based. This relegated B2B payments data to mere record-keeping minutiae and made the task of unlocking it a highly manual, administrative burden.
But with the news Thursday (Oct. 31) that Melio raised $150 million in a Series E funding to scale its automated accounts payable (AP) and accounts receivable (AR) platform, maximizing cash flow while reduce the amount of time spent managing their payment operations is top of mind for businesses.
And digitized payments data is emerging as a critical asset in doing so, offering unique insights for chief financial officers (CFOs) and finance teams looking to align financial strategies with business objectives. After all, for B2B firms, payments data holds the key to one of the most critical financial metrics: cash flow.
By analyzing patterns within AR and AP data, CFOs can better predict inflows and outflows, allowing for more precise cash management. This granular insight helps finance teams adjust credit terms, anticipate bottlenecks, and take proactive steps to keep liquidity at optimal levels.
Payments data is also becoming fundamental to effective anti-fraud measures, as well as key to compliance and governance initiatives. A robust risk management strategy powered by payments data provides not only an alert system but also insights on customer reliability and payment trends.
See also: B2B Payments Aren’t Boring Anymore: Here Are 8 Reasons Why
We are almost a quarter-century into the 21st century, and paper-based payments data can still be found making its way from cubicle to cubicle as back offices spend hours gathering what’s needed. But as automated solutions redefine the payments landscape, a shift toward data-driven finance has set the stage for a new wave of value extraction strategies that are not just about reconciling transactions but about leveraging payments data to make informed decisions.
“For large enterprises, the more data they have, the more informed decisions they can make,” Marcos Gelfi, vice president at Discover® Global Network, told PYMNTS. “The most important thing is for the business to understand what they are trying to solve for … and that is typically to help control the expenses from a business perspective and help with reconciliation purposes for efficiencies … The data that you capture is pretty important and can help you negotiate better with suppliers, and help you manage your budget better.
“Data is crucial for both large enterprises and small businesses,” Gelfi added. “It helps manage working capital and ensures efficient expense management.”
Payments data, especially when aggregated across time and business segments, provides CFOs with a rich dataset for strategic planning. With access to this data, finance teams can forecast more accurately and set strategic goals that align with cash flow projections. Some firms are now using payments data to identify which customer segments contribute most significantly to revenue stability, allowing them to prioritize relationship-building efforts accordingly.
Faster collections translate into more visible cash flows, and a steady stream of data through gateways’ enhanced reporting can help chief financial officers and other executives more accurately forecast cash flows that have yet to materialize, Bank of America Managing Director, Head of Global Banking Merchant Product Juan Garrido told PYMNTS.
Read more: The Strategic Role of AI in Accounts Payable
Increasingly, firms are integrating payments data with automation tools to streamline manual financial processes. For example, automating accounts payable and receivable processes based on payments data has been shown to reduce errors and improve efficiency, freeing finance teams to focus on higher-value strategic initiatives. Additionally, automated reconciliation tools are providing CFOs with real-time visibility into outstanding payments, reducing the administrative burden of manual reconciliation and speeding up close times.
“The B2B money movement space has not yet benefited from some of the real innovations,” Seamus Smith of FIS told PYMNTS, adding checks still account for “nearly 40%” of B2B payment volume in the United States, even though they are prone to fraud and reconciliation errors.
His comments were echoed by a separate Smith, Steve Smith of Esker, who told PYMNTS: “We’ve seen a growing emphasis on the need for DSO management.”
When embedded within broader enterprise resource planning (ERP) systems, payments data automation enhances operational agility, allowing firms to adjust rapidly to market changes. And the real value of payments data lies in its potential to support growth-focused decisions.
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