CFOs Seek New Levels of Efficacy in 2023 Systems Investments

With all the digital transformation that took place across various systems during the first two years of the pandemic, more firms are now filling in gaps or upgrading.

They’re making new investments in areas like procurement, accounts payable (AP), accounts receivable (AR), and risk.

In “Digital Payments Technology: Investing in Payments Systems for the Digital Economy,” a PYMNTS and Corcentric collaboration, 250 chief financial officers shared insights about systems investments they are making or intend to make across AP, AR, fraud prevention and risk management, working capital management and procurement.

“Some of these objectives, such as enhancements to [AP and AR], are relatively new priorities,” the study found. “For example, just 29% of companies funded new AP systems during the pandemic’s early stages, with 21% of all companies making investments focused on continuing operations. Now, 81% of companies are investing or planning to invest in AP to improve their business processes.”

While COVID-era system investments were often made to handle sudden business disruptions brought on by lockdowns, restrictions and supply chain problems, CFOs are now prioritizing their system investments based on long-term considerations like growth and profit.

Only three years have elapsed since the emergency was declared and companies were making on-the-fly decisions to keep commerce rolling at an unprecedented time. But the study noted that “among the companies that invested in digital technologies early in the pandemic, 38% have since terminated at least one of those investments.”

Much of that is down to the ongoing acceleration in digital tools and platforms that have advanced, considerably in some cases, with three intense years of learning now behind them.

Data in the new report showed that many retailers and manufacturers plan to continue investing in their working capital systems, as 41% of companies are currently investing in their working capital systems, and 42% plan to make future investments.

“Most of the spending to date has been aimed at lowering costs and modernizing business processes, and these goals are also expected to drive future spending: 29% of retailers and 28% of manufacturers say the most important reason for investing in their working capital systems is to cut costs,” the study stated.

Digging deeper into priorities for 2023, the study found that 57% of manufacturers and 54% of retailers said the most important reason for their investments in digital procurement systems is to modernize their procurement processes, while 37% of manufacturers and 20% of retailers said the modernizing working capital and credit systems top their list.