Change is upon us.
Reacting to the ripple effects from COVID-19 isn’t enough anymore if you want your finance department to succeed in the future.
In 2021, you need to take in the upcoming trends and respond with long-term goals and success in mind. Knee-jerk, band-aid solutions, may have been enough when remote work and mandated lock-downs were temporary, but they’re not sustainable long term.
Predicting the future so you can better plan for it is imperative for any forward-thinking finance professional.
We did the work for you and compiled this list of upcoming trends to look out for in 2021! Digital transformation is a common theme among them, reflecting that an increasing amount of CFOs have it high on their priority list.
According to a recent survey by CFO.com, 34% of CFOs said they are prioritizing financial digital transformation in 2021.
1. Fintech Is On The Rise
General outlooks and approaches to Fintechs shifted when the pandemic started. Recent surveys by McKinsey, found that Fintechs are matching traditional banks in terms of client trust. Also, 40% of US financial decision makers report that they use at least one, if not more, Fintechs.
All Fintech types, including payments, have grown since COVID-19 struck and presented us with new challenges. Payment automation in particular has seen an increase in interest since it makes processes more efficient and allows staff the flexibility to work from home.
Per Business Insider, 44% of businesses are looking to add automation to their payables processes as a way to capitalize on the efficiency and cost-cutting benefits that come with it.
Fintechs have more specific expertise in payments and payment automation, and that can make all the difference for your team. If you want to know more about why choosing the right payment provider, i.e. a Fintech, is important, check out our free ebook.
The increased interest in Fintech is tied to the rise of automation, in general, but especially in B2B spaces.
Automation isn’t a question of if anymore, but when. According to Forbes, it’s not even a debate as finance leaders are increasingly making investments in cloud computing and software — another sign that businesses are adapting to allow remote work, because it’s becoming widely accepted that it’s here to stay in one form or another.
2. Remote Work: The New Business Model
Adjusting to complete or partial remote working was a major part of 2020. Now that we’re moving into a new year and your company has the distance to examine the benefits and drawbacks that emerged, it’s time to decide whether working from home is to remain an option for staff.
The general consensus is that it’s going to stick around, either as a full-time option or as a hybrid situation.
Recent studies predict that by 2025, 75% of working professionals will work from home for at least one full work week per month.
The vast majority of employees seem to want to continue working from home, and they’re not alone as CFOs appear to be on the same page. A 2020 Gartner survey found that 74% of CFOs intend to keep at least some percentage of their employees at home on a permanent basis.
Remote working being the norm for finance teams in 2021, and going forward, means that organization need to provide the right technology tools to their staff. Technology that lets them efficiently and securely manage cash flow, invoices, and payments no matter where they are.
3. Decentralization of Finance Through Automation
2020, for all its challenges, served as a real life example of where the weak spots in our business models are. One of them is how central finance was and how beholden our staff was to being in the office to manage it.
According to Forbes, businesses are evaluating their processes to see where they can replace monotonous office-bound steps with automation that can be accessed from anywhere, at anytime. Freeing up staff to focus on more valuable work.
Having a transparent view into your cash flow process at any point in time and precise control over it is an advantage you can’t afford to miss out on. One that requires the right platform.
Here at OnPay Solutions, our payment platform allows you to maintain 100% control of your funds and processes while also allowing you to keep your banks and accounting system.
Our cloud-based payment portal allows:
Speedy Access to Working Capital
A transparent view into your payment processes and statuses also benefits and builds your relationship with vendors and suppliers. Automating and digitally transforming your finance department has broader benefits as well. Per Business Insider, firms that use digital payable platforms see 81% slower processing costs and 73% faster processing cycles.
4. Paper Checks Are On The Way Out
This trend is one that has been a long time coming. Paper checks have stuck around longer than most would have predicted simply because they’re familiar and easy to use. After all, you only need a name and a mailing address to send one out.
However, thanks to increased remote work, it’s become a hassle to handle checks. Some companies went as far as sending check printers home with their staff — a temporary solution that won’t be sustainable long term. Paper is a burden on your staff and your department’s functionality, and it costs you time and money.
According to PYMNTS.com, paper-based processes cost as much as $8 more per transaction than electronic payments. Added up, this means that large-scale adoption of ePayments could collectively save businesses more than $100 billion.
Our solution offers you the opportunity to leave behind paper checks in favor of electronic payment methods and keep your existing ERP while optimizing your workflows.
Besides cutting costs and saving time, eliminating checks also eliminates a large source of payment fraud. Studies have shown that successful check fraud makes up 47% of overall fraud losses for banks, surpassing other transaction types.
5. Electronic B2B Payment Methods Are Here to Stay
Paper checks and more traditional payment methods are being used less and less, and the question is, what’s replacing them?
Per a PYMNTS study, as of 2020, virtual cards are the fastest growing payment type in B2B payments, outpacing ACH payments and purchasing cards. One reason they’re growing so quickly is that they open up the door to new revenues.
Our v-card solution empowers you to turn spend into profit with 1% cashback on AP spend via monthly rebates.
Virtual cards are also uniquely positioned to make remote work possible and efficient and enable paperless accounts payable. They will:
Pay cash rebates every month with no thresholds
Work within existing standards and processes
Easily integrate with your existing ERP or accounting system
A virtual card is a 16-digit unique card number that is created to be single use. It is essentially a virtual credit card that is designated for paying your vendors.
Swapping paper-burdened payment processes for one that uses digital payments and virtual cards will streamline your finance department, open the door to cash rebates, and enhance internal controls.
2020 was a challenging year, and the effects of it are rippling out into 2021. Many of the trends we went over in this post can be traced back to something that happened the year prior. The rise in Fintechs, increased remote work, decentralization, and replacing paper checks with electronic payments are all major trends because of what happened last year.
What’s important is to recognize these trends and take steps to ensure your team is prepared for them! Our accounts payable solution will give you the flexibility and security you need.
If you’re ready to start a conversation about advancing your AP department forward with our help, reach out today.
Interested in expanding your knowledge base? Check out these resources: