Is a Payment Really Just a Payment? 

Is a Payment Really Just a Payment?

On the face of it, one could argue that a payment is just sending funds from point A to point B, a simple transactional operation involving the debit of one account to settle another account.

Beyond the Simple Transaction: The Hidden Complexities of Payments for CFOs and Treasurers

Yet for a CFO or treasurer, it involves sourcing accounts payable information from their ERP or accounting system and instructing their payments provider, often a bank, to execute the said payment. It may be in the base currency the treasurer works in or it may be in a foreign currency. It may be a domestic payment, or it may involve sending funds abroad. And, with all these steps, comes the actual complexity of making payments, a complexity which is often magnified by the volume of payments which needs to be made, the types and destination of payments and the number of currencies involved.

Indeed, treasurers can quickly be confronted with operational challenges which appear way before payments are even instructed, during the payment process, and after execution. They often need to juggle internal systems (ERPs or TMS if they have any) which may or may not talk to each other, as well as external systems which also may lack inter-connectivity. Extracting and integrating data can be complex and time-consuming. On the other side, reconciling payments back into an internal accounting system efficiently and accurately is essential for maintaining financial integrity and reducing errors. And in the middle of this, accessing a payment provider which can handle various payment types, apply different currencies, and ensure timely and accurate transaction execution for a cost-effective all-in price is crucial.

The Operational Challenges: Juggling Systems, Data Integration, and Reconciliation

The list of challenges is endless, and one should not under-estimate the associated financial risks and operational strains involved. Simplifying processes with the hyper automation of financial flows and taking away the complexity and risks using the right technology and the right payments partner are key to making these operations seamless and taking back a payment to what it should be: a simple financial flow.

Simplifying the Process: Hyper Automation and the Right Technology

The great news is that many tech solutions are available to support the simplification of such processes and integrate with payment partners with international reach. Some solutions also don’t need to involve long and often daunting implementation projects thanks to the development of cloud-based platforms.

No need to say that they also expand beyond the management of payments and aim at making all internal and external financial flows seamless and easy to manage.

Tech Solutions for Seamless Financial Flows: Cloud Platforms and Beyond

For the more mature and complex organisations, these platforms become a real in-house banking eco-system. Equally, Treasury As A Service (TaaS) is another kind of tech-driven proposition. Whilst treasurers are often aware of TMS, the concept of TaaS is still a little more remote yet critical for any organisation which does not need a full-fledged treasury solution but could benefit from some key treasury management functionalities. You simply consume the modules that you need, which you add on top of your existing ERP or TMS at your pace and to deal with your specific process challenges.

The Rise of In-House Banking Ecosystems and Treasury as a Service (TaaS)

The technology to help treasurers is readily available and accessible. So next time you are about to make a payment, ask yourself: is your payment just a payment?

At Fennech, we understand the unique challenges enterprises face in navigating today’s complex financial landscape. We offer tailor-made, scalable solutions designed to streamline your operations and empower strategic decision-making, and payment hyper-automation is one of the many features we offer.

If you would like to discuss with us about how Fennech’s Platform can help you streamline your payment processes whatever your size or level of complexity, Contact Us or send an email to info@fennech.com

This article was written by a member of the Fennech team for industry magazine Der Treasurer and published in April 2024.

Related Posts

About Us

Fennech manages all your business financial operations on one swift, secure, and easy to use platform.

Obtain the latest insights & resources in your mailbox

Let’s Socialize

Popular Post