74% of SMBs Saw Payments Delayed Due to Pandemic

Late payments have been a notable by-product of the pandemic — and chief financial officers and other executives have been digitizing operations in an effort to meet those challenges to cash flow … and overcome them.

In The Strategic Role of the CFO Playbook, a report done jointly between PYMNTS and Versapay, more than 400 CFOs from enterprises generating at least $25 million were surveyed.

As many as 74 percent of the smaller companies — defined as generating between $25 million and $100 million in sales — said that delayed payments were and are a problem caused by the pandemic. Part of that is due to the reliance of paper-based means in getting paid, most notably the paper check. The frictions do not stop at smaller firms, however, as 24 percent of B2B  payments made by firms generating more than $1 billion in annual sales are made by paper check.

Against that backdrop, an increasing  number of companies are digitizing their back office operations — 92 percent of smaller companies are modernizing their accounting functions.

And as for the motivations for digitization, the data show that across all firms, no matter the “size” of their top lines, the impetus has been to benefit customers and vendors

But it’s no easy haul. Many of these same companies see some roadblocks in place on the journey to digitization.  The most pressing hurdle, for firms up to $500 million in sales, has been insufficient IT resources. For larger companies, it’s been a matter of tackling problems “from other areas” within the enterprise. Embracing cloud based integrations and improvements, especially for AP and AR functions, can smooth the journey.