34% of Real Estate B2B Payments Are Made by Check 

While digitization has been a nearly universal pursuit for company finance leaders over the past year, it has played out differently in various sectors. This reflects the fact that every industry has had its own set of challenges and pain points. 

For example, paper check payments remain prevalent in commercial real estate, an industry that often deals with large-dollar amounts. Check payments make up 34% of B2B payments in this sector, according to The Strategic Role of the CFO, a PYMNTS and Versapay collaboration based on a survey of 400 chief financial officers (CFOs). 

Get the study: The Strategic Role of the CFO: How AP and AR Digitization Are Transforming Customer Relationships 

That percentage is well above the average of 25% for the whole sample of four distinct sectors: finance and insurance, industrial and manufacturing, commercial real estate and technology. Technology firms — not surprisingly — use checks the least, with only 20% of firms’ B2B payments made by check. 

Optimizing Invoicing, Payments Processing 

PYMNTS’ industry analysis confirms that the digitization of accounting operations is widespread, with at least 90% of firms in the four sectors currently engaged in this process. Specific priorities emerge within each industry, however. 

Optimizing invoicing processes for customers and vendors is a standout priority for industrial and manufacturing firms, with 73% of them concentrating their digitization efforts on this area. This may speak to the role that modernized invoicing and payment systems could play in improving supplier and consumer relationships in traditional industries where legacy, paper-based processes have been more prevalent. 

In contrast, the finance and insurance sectors are more focused on payments processing, as payment time and settlement are critical. Seventy-three percent of the CFOs in these industries cite payments processing as an accounting and finance area that is being digitized. 

Digitizing for Transformation, Automation 

PYMNTS research shows that more traditional industries, such as waste management, utilities and construction, are more inclined to believe that accounts payable (AP) and accounts receivable (AR) digitization is mainly about transformation — using digital tools to do things in new and better ways. Seventy-eight percent of executives in the waste management sector see digitization through the lens of transformation, as do 62% of those in utilities and 61% of those in construction. 

On the other hand, information-based industries, such as technology and finance, are more likely to view digitization as being largely about the automation or elimination of manual functions and processes. In fact, 55% of finance and insurance executives view automation as a primary motivating factor, as do 52% of those in the technology sector. 

There are different ways to interpret this data. One possibility is that firms in the information economy place a premium on efficiency, as their margins often depend on limiting back-office overhead. It is also possible that in more traditional industries, where digital technology has made more limited inroads, executives are more likely to want to comprehensively transform outmoded practices. 

The reality is that most firms are motivated by both interests, just to varying degrees. This indicates a need for digitization solutions that are comprehensive yet capable of automating specific tasks.