In a recent report published by Gartner, Inc regarding the top Initiatives in 2020 for finance executives of Mid-Sized organizations, cost-cutting remains a top priority.  In a key finding, the report claims seventy-seven percent of CFOs cite the business’ lack of interest in right sizing cost structure as a top challenge, but only 18% are confident in their ability to solve this cost Structure Challenge.

Not surprisingly, 43% of CFOs report inefficient or ineffective long-range planning as a top problem with only 14% reporting a high level of confidence in solving this challenge.

The other top priorities include:

• Metrics and management reporting
• Finance and technology optimization
• Finance organization strategy and structure.*

Interestingly, payment fraud and security did not make the top five initiatives in the above report, but there is some interesting data that indicates it should be a concern.  The AFP Payments Fraud and Control Survey Report showed that 82% of companies were targets of payment fraud last year.  This figure is climbed dramatically to the tune of 20 percentage points higher than reported in 2014.

A couple of other key stats around payment fraud as cited by the report:

• 80% of organizations experienced Business Email Compromise
  • 54% reported financial loss as a result of the compromise
  • 70% of scams targets checks
• 70% of organizations experienced check fraud
• 64% of attempted or actual payment fraud resulted from actions of those outside the organization**

Both reports mentioned above include additional detail around the statistics and are both good reads. 

*Information cited from Gartner, Inc  Finance Top Initiatives in 2020.  The full report is available at Gartner.com
**Information cited from 2019 AFP Payments Fraud and Control Survey.  The survey is available at AFPonline.org.

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4 Reasons Why Virtual Card Payments Have Surged To Record Levels – 1/8/2019

The role of the CFO looks significantly different in many organizations today than it did just 10 years ago.  While the CFO is still expected to optimize finances, they are increasingly asked to engage more closely with other departments.  Progressive organizations have found that collaborative internal partnerships drive increased revenue and reduced expenses, leading to a more efficient and effective use of funds. 

The CFO Alliance has tracked CFO trends for many years and recently released its annual CFO Sentiment Study for 2017.  This report contains some interesting insights into CFO priorities and strategic goals for 2017 if given additional spend.  Read on to see if these trends match your philosophy and company culture.

• If CFO’s were given $1M in additional budget to allocate:

o   40% would heavily allocate funds to marketing and sales

o   25% would allocate all funds to improving financial technology

• If CFO’s were given $500K in additional budget to allocate to Marketing:

o   44% reported they would allocate the funds to market research to improve the company’s understanding of addressable markets.

• If CFO’s were given $500K in additional budget to allocate to Sales:

o   38% of CFO’s reported they would focus spend on upgrading talent.

• If CFO’s were given $500K in additional budget to allocate to HR:

o   39% of CFOs reported they would allocated spend on developing in-house training programs.

While CFO’s are more concerned with marketing and market research in 2017, they are also focused on upgrading talent and staff training.   These trends point to the fact that CFO’s continue to be more engaged across organizations in the areas that directly impact revenue growth.

A final insight from this report relates to CFO’s desire to upgrade their financial technology.  In 2017 39% of the respondents said they would be pursuing a significant upgrade in their company’s information, data, and communications system in 2017, up from 29% in 2016. 

Do these results match your plans for 2017?  Are you planning additional spend in marketing or investing in upgrading your financial technology?  At Lost & Found I am always seeking to create efficiencies and allocate dollars where they can add the most value.  Conversely, I am also working hard to contain cost by optimizing expenses.  Striking the right balance between these priorities is the key to leading our organizations to sustained profitability in the years ahead.

Many online businesses such as Orbitz and Expedia, have empowered their customers to make travel arrangements and schedule activities quickly and efficiently using their online payment systems.  However, with travel and activity sites transmitting huge amounts of data worldwide to hotels, airlines and other travel providers, the need for increased security and efficiency has increased as well.

Virtual cards have stepped into this void by offering these travel sites a randomly generated, single-use, sixteen-digit account number to pay their customers’ travel expenses which eliminates the need to store their customers’ credit card information.  This makes virtual cards one of the most secure forms of payment available today. 

However, virtual cards offer an even better benefit beyond security – cash back.  Unlike other forms of payment, virtual cards offer a quarterly rebate between .50% and 1.50% of your AP spend.  This is a huge incentive for businesses to switch to this new payment system.  Finally, virtual cards offer increased efficiency and a much lower cost of doing business.

With the many advantages of using virtual cards, more brick and mortar businesses are looking to join their online counterparts in implementing virtual cards systems.  If your business is looking for a more efficient, secure and less expensive way to manage your accounts payable, read on to learn how virtual cards may be a great fit.

Cash Back and Reduced Cost

One of the most compelling reasons to switch to Virtual Cards is the rebate.  Virtual cards pay between .50% – 1.50% cash back on your annual AP spend.  This additional revenue combined with reduced costs of managing your accounts payable can significantly reduce the cost of doing business for your AP department.

Payment Efficiency

The ability to transmit payments quickly and efficiently is important to any company.  But the beauty of virtual cards is that they work with any ERP system to deliver both scheduled and on-demand payments with a significant reduction of AP staff time.  Additionally, virtual card providers that offer push-pay services can integrate your ACH, wire, and check payments as well to increase efficiency in payments to your suppliers that don’t offer virtual cards.

Increased Security

Every day we read about another major business that was hacked with thousands of customer data stolen.  Virtual cards circumvent hackers by generating a new one-time use unique number that is only valid for that transaction.  Because companies no longer need to store customer’s credit card information along with the sixteen-digit uniquely generated number means that virtual cards offer an almost unparalleled level of payment security.

Virtual cards are truly a win-win for businesses offering a significant source of revenue along with increased efficiency and secure payments.  With benefits like these it won’t be long before the brick and mortar businesses are jumping on the virtual card bandwagon along with their online counterparts.

 

 

 

 

 

Usage of virtual cards grew at breakneck speed in 2016 and is expected to double between 2015 and 2018.  Some estimates see virtual card payments growing to over $500 billion by 2024.  What is driving this trajectory and is your firm positioned to take advantage of this cost saving resource?

Virtual cards are essentially a one-time use payment system that generates a new account number for each invoice.  Unlike a credit card that is used over and over, the virtual card system generates a new account number for each transaction increasing security and efficiency while driving down the cost of accounts payable.

So why are single-use virtual payments taking off now?

• Rebates.  Virtual cards offer between .75% and 1.5% cash back on your total AP spend.
• Cost savings.  Virtual cards offer substantial savings over paper checks ($9 verses $33 per transaction) and credit card payments eliminating the need for paper, postage and staffing costs to process physical checks and bank fees associated with credit card transactions.
• Enhanced security through single use card numbers.  Virtual cards generate a new number for each transaction significantly reducing the opportunity for fraud.
• Greater efficiency that reduces errors and reconciliation issues.  Because virtual cards offer greater controls which limit the amount of the transaction, businesses have greater control over the reconciliation process.
• Increased payment times for suppliers.  Suppliers can now be paid faster reducing days to be paid and thereby increasing working capital due to the speed of virtual payments.
• Enhanced data capture.  Virtual cards offer the ability to include customized data capture fields to tighten controls and improve efficiency.

If you haven’t considered virtual card payments for your organization, Lost and Found is offering complementary supplier match reports to give you an accurate look at which of your vendors are already on the program and what the revenue opportunity is for you.