81% of Retailers and Manufacturers Plan to Upgrade Accounts Payable Systems

The old saying goes that necessity is the mother of invention.

We might add: Necessity is the mother of tech upgrades in the back office.

To that end, in the report “Digital Payments Technology: Investing in Payments Systems for the Digital Economy,” a PYMNTS and Corcentric collaboration, 250 CFOs at retailers and manufacturers detailed the improvements they made — digital upgrades chief among them — during the pandemic and beyond.

The systems investments had been, initially, a way to respond to the business disruptions caused by COVID-19. More recently, as the pandemic has receded but inflation has skyrocketed, overhauling accounts payables and receivables systems and functions serves as a way to grapple with macro uncertainty.

That uncertainty has spurred more respondents to mull changes to the back office, with new priorities in the mix. To get a sense of the magnitude of change, consider the fact that 29% of companies invested in new accounts payable (AP) systems during the pandemic. But now, looking ahead, a full 81% of companies plan to do the same in the months and years ahead.

We found that 77% of manufacturers and 47% of retailers say the most important reason for investing in improvements to AP systems is to improve the payments process. Improving the payments functions, we note, winds up boosting cash flow visibility. A company with healthy cash flow visibility is better prepared to navigate volatile supply chains and interest rates.

Modernization and Costs Are in Focus

As part of the bid to digitize more of their operations, the chart below shows the reasons why many of these CFOs view investing in digital payments would be beneficial. Procurement, which is the process by which these companies find, bid on and obtain the goods and services they need to operate in the first place, appears to be a key area of focus for many of these firms.

A full 57% percent of manufacturers and 54% of retailers say the most important reason for their investments in digital procurement systems is to modernize their procurement processes, while 53% of retailers and a bit more than 38% of manufacturers say the most important reason for investing in working capital and credit systems is to reduce costs.