CFOs Drive Focus on Cash Conversion as Emerging Firms Prioritize Velocity

The ability of companies to swiftly convert sales into usable cash is rapidly becoming a key differentiator for emerging enterprises, moving beyond a back-office concern to a core driver of business performance. A recent PYMNTS Intelligence project, the Time to Cash Index™, underscores this shift, revealing a growing emphasis on optimizing cash flow as a means of bolstering resilience and competitiveness.

For businesses generating between $250 million and $2.5 billion in annual revenue, the speed at which receivables are collected is no longer simply an accounting metric. It’s a strategic imperative, directly impacting operational agility and investment capacity. This evolution is placing increased responsibility – and influence – on the role of the Chief Financial Officer.

The Evolving Role of the Modern CFO

Traditionally focused on financial reporting and compliance, the modern CFO is increasingly taking ownership of initiatives designed to improve cash flow, liquidity, and overall financial control. “CFOs are in the business of control,” explained Jeff Feuerstein, SVP of Paymode Product Management and Market Strategy for Bottomline, during a recent PYMNTS Roundtable. This isn’t merely about oversight; it’s about actively shaping processes to accelerate the movement of capital.

A key enabler of this transformation is the increasing adoption of automation and artificial intelligence (AI). Feuerstein highlighted the potential for technology to move beyond providing insights and actually *make* decisions, streamlining processes and reducing manual intervention. This expectation of reliable and transparent payments and receivables is driving CFOs to anchor these efforts within their organizations.

The ‘First-Mile Problem’ and Supplier Readiness

However, accelerating time to cash isn’t solely an internal exercise. A significant bottleneck lies in supplier readiness. Karen Webster, CEO of PYMNTS, identified a “first-mile problem” in receivables – the challenges associated with onboarding suppliers, ensuring accurate documentation, and verifying data integrity. If these foundational elements aren’t in place, the entire cash cycle slows down.

Prashanth Ravishankar, SVP for Coupa Advantage and Supplier Offerings, noted a common misconception: many suppliers *believe* they are prepared to transact, but the requirements for seamless payment are often more complex. He emphasized the distinction between being “ready to do business” and being “ready to get paid,” highlighting the importance of trust, clarity, and compliance before an invoice even enters the workflow. According to the World Bank, trade finance gaps – often stemming from supplier onboarding challenges – reached an estimated $1.5 trillion in 2022, hindering global economic growth.

Transparency and Automation: Building a Seamless Cash Journey

Coupa’s approach centers on automating supplier onboarding, ensuring buyers can immediately verify requirements and trust incoming invoices. This focus on eliminating early friction is critical. Invoice transparency is equally important; buyers need confidence that invoices accurately reflect agreed-upon purchases, and automation plays a vital role in establishing that confidence.

Bottomline’s Paymode-X network, with over 550,000 authenticated suppliers, further reinforces this trust. The goal is to create a predictable and efficient cash journey, minimizing delays and maximizing liquidity.

Data-Driven Expectations and the Rise of Real-Time Analytics

The demand for greater financial transparency extends beyond speed. Pamela Novoa Ralli, head of product management at FIS, pointed to a dramatic shift in buyer expectations, with customers now demanding real-time analytics and significantly higher data accuracy. “Customers now ‘expect analytics and the insight and the intelligence that you deliver to be 95% plus accurate,’” she stated. This heightened expectation is reshaping the entire buyer-seller relationship.

Companies are seeking both control and speed, with some preferring human oversight for critical decisions while others prioritize fully automated workflows. Successfully navigating this diversity requires flexible solutions that can accommodate varying organizational cultures and risk tolerances.

Overcoming Inertia and the Persistence of Manual Processes

Despite the availability of advanced technologies, Feuerstein identified inertia as the biggest obstacle to improving time to cash. Many organizations are hampered by a reluctance to abandon long-standing manual processes, including paper-based invoicing, spreadsheet-driven reporting, and cumbersome approval workflows. He described the U.S. B2B payments landscape as a “fragmented ecosystem of paper-based processes,” highlighting the need for modernization.

The issue isn’t a lack of technology, but a lack of prioritization. Processes that aren’t viewed as strategic often remain stuck in outdated routines. Organizations that recognize the back office as a strategic function are more likely to embrace automation and accelerate their cash cycles. The Bureau of Labor Statistics reported that productivity in the U.S. nonfarm business sector increased at an annual rate of 2.7% in the first quarter of 2024, demonstrating the economic benefits of process optimization and technological adoption.

Ultimately, accelerating time to cash requires a holistic approach that combines data, control, and automation, supported by a commitment to people, processes, and technology. Firms that successfully integrate these elements will be well-positioned for faster, more reliable financial performance in the years ahead.