The Payments Modernization Gap Plaguing Finance Leaders

Business finance leaders are caught in a frustrating paradox. They know exactly what would fix their cash flow problems, but they cannot seem to get there. New research from Fortis reveals that nearly three-quarters (72%) of finance leaders believe modernizing payments would significantly help address their cash flow challenges, yet just 21% report having modernized and effective payments infrastructure in place. This gap between awareness and action is becoming a defining business challenge as companies navigate rising operating costs, inflation, and an increasingly complex economic environment.

The Cash Flow Crisis Hiding in Plain Sight

Cash flow remains the lifeblood of every business, but for many organizations, the flow is anything but smooth. The research findings paint a stark picture of the obstacles finance teams face daily:

• 61% of finance leaders cite high Days Sales Outstanding (DSO) as a top working capital concern
• 59% point to a lack of real-time cash visibility as a major impediment
• 75% cite the difficulty of integrating automation with existing systems and tools as a primary barrier
• 64% point to organizational inertia or a preference for maintaining current processes, despite their limitations

These numbers reveal a fundamental truth about modern corporate finance: the systems meant to move money efficiently are often the very things slowing it down. High DSO is not simply a result of customers paying late. The delays frequently start within a company’s own financial processes. Invoices go out late or contain errors that lead to disputes, while manual reconciliation and payment matching can leave cash sitting unaccounted for. Much of this waste is within a company’s control, yet it persists because the infrastructure to fix it has not been built.

Why the Gap Exists

Understanding why finance leaders acknowledge the problem but struggle to solve it requires examining the structural barriers that have built up over decades. Corporate payments infrastructure is rarely designed from scratch. It accumulates. Companies end up with multiple platforms performing adjacent functions, multiple sources of transaction data, and multiple control environments governing different stages of the same payment. Complexity itself becomes an operating expense, and a slippery one at that, because the cost is scattered across software budgets, bank fees, headcount, implementation projects, and operational risk.

The challenge of improving automation extends beyond any single technology. Financial operations often span multiple systems, departments, and payment methods, making it difficult to streamline processes and access accurate, timely financial data. Organizations that have attempted piecemeal modernization frequently find themselves with a patchwork of legacy and modern tools that do not communicate effectively, creating new inefficiencies even as old ones are addressed.

The Cost of Inaction

The consequences of inefficient financial processes extend directly to the bottom line. Inaccurate or delayed invoices slow collections, create additional administrative work, and leave businesses waiting longer to receive payments. When finance teams spend the majority of their time on manual processes rather than analyzing payment data, they miss opportunities to manage risk and make better business decisions.

Brent Coles, CFO of Fortis, frames the opportunity clearly: “Increased automation is a real opportunity to change what finance can contribute to the business. When finance teams spend less time on manual processes and more time analyzing payment data, they can identify opportunities to manage risk and make better business decisions. Instead of simply reporting on what happened last month, CFOs can help shape decisions around pricing, investments and growth, becoming true strategic partners to the business.”

Connected Systems Drive Better Outcomes

The research reveals a compelling correlation: organizations with more connected financial systems report higher invoice accuracy, lower average DSO, and greater use of payments data to inform business decisions. These connected organizations are also more likely to be viewed by their CEO and board as strategic growth partners rather than functional resources. The difference between a finance team that is tolerated and one that is valued often comes down to the quality of the systems behind it.

This correlation suggests that payments modernization is not merely a technical upgrade. It is a strategic transformation that repositions finance from a reporting function to an advisory one. When finance leaders have real-time visibility into cash positions, they can operate with smaller precautionary balances, concentrate surplus cash more effectively, and reduce unnecessary borrowing. For a large enterprise processing billions of dollars in payables, even relatively small improvements in payment timing can influence average cash balances, short-term borrowing, and overall working-capital efficiency.

Real-Time Payments Reshape Treasury Strategy

The emergence of real-time payment infrastructure is giving CFOs something more valuable than speed: optionality. Real-time rails, richer ISO 20022 data, virtual accounts, embedded foreign exchange, and automated treasury systems are providing finance teams with new levers over variables they have historically struggled to control with precision. These include when liquidity leaves, where it sits, what moving it costs, and what information triggers its movement.

Legacy payment infrastructure forces companies to build settlement delays into their treasury decisions. If a payment takes days to arrive, treasury needs to initiate it days before the obligation is actually due, effectively transferring control of the cash before the supplier needs to receive it. The shorter the gap between initiation and receipt, the closer companies can move payment execution toward the economically optimal moment.

A CFO does not necessarily want to pay faster simply because the infrastructure can settle instantly. The economically optimal outcome may be to hold cash until the last permissible moment, earn or deploy it elsewhere, and then settle the obligation immediately. Payments begin behaving more like logistics: each dollar routed according to the economics of the journey. A transaction might travel over ACH because cost matters more than speed. Another might use an instant-payment rail because avoiding a late fee is worth more than the incremental transaction cost.

AI as a Forcing Function for Consolidation

Artificial intelligence is emerging as perhaps the most powerful catalyst for payments transformation. The biggest AI opportunity in payments may not be automating another task or bolting another copilot onto the finance stack. It may be moving intelligence above individual rails and providers, allowing companies to consolidate the sprawling infrastructure they spent years assembling.

An intelligent orchestration layer could evaluate payment method, counterparty risk, liquidity, FX exposure, transaction costs, and internal policy before recommending how money should move. It could prepare transactions, validate information, route approvals, and escalate exceptions while maintaining an audit trail of the decisions behind each action. This shifts the finance function from reactive processing to proactive orchestration, where every payment is an optimized decision rather than a routine transaction.

However, as industry experts caution, this is not about abandoning legacy systems but modernizing around them intelligently. The most successful transformations will be those that recognize the value embedded in existing infrastructure while building new capabilities on top of it. Companies that attempt a complete rip-and-replace often face prolonged implementation timelines, cost overruns, and operational disruptions that can negate the benefits they set out to achieve.

The Path Forward for Finance Leaders

For CFOs and finance leaders staring at the 72-versus-21 gap, the path forward requires both ambition and pragmatism. Several principles should guide the journey:

• Start with visibility. Before automating payments, ensure you have real-time visibility into cash positions across all accounts and entities. You cannot optimize what you cannot see.
• Audit your payment stack. Map every system, rail, and process involved in your payment lifecycle. Identify overlaps, gaps, and integration points before investing in new technology.
• Prioritize invoice accuracy. High DSO often begins with poor invoicing. Automating invoice creation and improving data accuracy can accelerate collections without requiring a complete infrastructure overhaul.
• Embrace incremental modernization. Rather than waiting for a budget cycle large enough to fund a complete transformation, identify high-impact, low-risk improvements that deliver measurable returns and build momentum.
• Leverage AI strategically. Use AI not just to automate existing processes but to create an intelligence layer that optimizes payment decisions across the entire organization.

A Strategic Imperative, Not a Technical Project

The research from Fortis underscores a reality that finance leaders increasingly understand: payments modernization is a strategic imperative, not merely a technical project. Companies that close the gap between knowing what needs to be done and actually doing it will gain a meaningful competitive advantage. They will enjoy lower working capital costs, better cash visibility, more strategic finance teams, and stronger relationships with boards and executive teams.

Those that allow the gap to persist will find themselves at a growing disadvantage. In an environment where operating costs are rising, economic conditions are uncertain, and competitors are investing in intelligent finance infrastructure, the cost of maintaining outdated payment systems will only increase. The question for finance leaders is not whether to modernize, but how quickly they can close the gap between intention and execution.

The data is clear. The gap is real. And the companies that act decisively will be the ones that turn their finance function from a cost center into a strategic growth engine.

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Edited by Palawan @QUE.COM
Website: https://QUE.COM Intelligence
Sponsored by: https://MAJ.COM AI Autonomous