Want to Keep Customers? Digitize Your AR/AP Functions

While the movement to digitize payments was underway long before anyone hear the term “COVID-19,” the pandemic gave digitization a new urgency as companies looked for ways to deal with disruptions caused by the virus.

Since then, companies have begun digitizing many of their accounts receivable (AR) and accounts payable (AP) functions to extend the overall lifetime value of their customers.

PYMNTS research shows that a wide majority of chief financial officers in the real estate, wholesale trade and industrial/manufacturing sectors say that digitized AR/AP functions can let them build more collaborative relationships with customers.

For example, 68% of real estate CFOs, 50% of wholesale trade CFOs and 77% of industrial/manufacturing CFOs reported that they think digitizing payments systems will make their AR/AP operations more transparent on channels such as customer or tenant portals.

And that transparency boosts customer value, according to 68% of real estate CFOs, 64% of wholesale trade CFOs and 68% of industrial/manufacturing CFOs.

You see a similar pattern in how CFOs see the benefits they expect to reap from setting up more efficient internal payment processes. As their businesses share these benefits with customers, they can facilitate a faster turnaround for payments.

Electronic Payments on the Rise

The most obvious sign of the rise of AP/AR digitization is the move toward more frequent use of electronic payments as the use of cash wanes.

Compared to the cross-industry average of 68%, real estate companies (100%), wholesale trade businesses (73%) and industrial/manufacturing firms (86%) say they are making more extensive use of automated clearing house (ACH) payments.

Meanwhile, 95% of real estate operations, 68% of wholesale trade businesses and 82% of industrial/manufacturing companies say they’ve cut back on their use of cash.

Would you like to learn more about this trend? Download your copy of PYMNTS’ Strategic Role Of The CFO Playbook, a Versapay collaboration.