Report: CFOs See Digital AR/AP as Best Way to Boost Efficiency and Transparency

The COVID-19 pandemic disrupted normal operations for many businesses and led to cash squeezes as consumers delayed making payments. As painful as this experience was, chief financial officers (CFOs) at organizations quickly recognized that the upheaval created an opportunity. Digitization initiatives simmering on the back burner were prioritized and accelerated. Companies began to invest in technologies designed to improve their cash flow management, payments processes and the quality of communication with their clients.

To many CFOs, the digitization of accounts receivable (AR) and accounts payable (AP) systems made their payments operations more efficient. By collaborating with customers through a cloud-based portal, digitization provides customers with an abundance of information, including payment histories, invoices and supporting documentation about each order that is filled and payments still owed. By improving transparency in their payments and billing processes, companies believe they are accessing closer, more collaborative experiences with customers that will increase the value of these relationships.

These are among the key findings from The Strategic Role Of The CFO Playbook: AR/AP Digitization And The Push To Enhance Customer Value, a collaboration between PYMNTS and Versapay, based on a survey of 400 CFOs during March and April 2021. We focus on key industries — real estate, wholesale trade and industrial/manufacturing — to gain insight into how companies in these sectors contended with the pandemic’s impact on their operations, including its effects on cash flow, the payments cycle and payments operations. Companies in these industries have been among the most innovative in implementing digitized AR and AP platforms and reaping the benefits they generated.

More key findings from the study include:

• 59% of CFOs at real estate, wholesale trade and industrial/manufacturing companies regard AR/AP digitization as an opportunity to transform their businesses. During the pandemic, CFOs recognized that digitization programs could help them resolve the interruptions to their cash flow brought on by the pandemic.
• 55% of real estate and industrial/manufacturing company CFOs say that it has become more important for them to increase the overall lifetime value of their customers since the pandemic started. CFOs have used the pandemic to carry out projects they believed would produce long-term benefits.
• 95% of real estate companies use cash less often since the pandemic started. The scaled-back usage of cash and the increased usage of electronic payments may be among the most visible benefits to emerge from the AR/AP digitization projects undertaken at so many companies.

Many businesses have benefited from the digitization of their AR/AP functions and payments processes they undertook in response to the pandemic. The technology is considered a key building block to developing and sustaining more cooperative and collaborative relationships with customers. Businesses expect the strengthened relationships to generate greater value for their organizations that would not be possible without the digitized systems.

To learn more about how companies are using digitized AR/AP systems to improve operations and enhance the value of their customer relationships, download the playbook.