Large Companies Lead the Way in Making Business Payments Digital
Originally appeared in PYMNTS.com
Chief financial officers (CFOs) say digitizing their accounts receivable (AR) and accounts payable (AP) functions is integral to modernizing their payments operations and improving balance sheet management.
The CFOs of the largest companies are especially likely to believe that, as 74% of those at firms with $1.5 billion to $2 billion in annual revenues said they believe digitization is important to improving balance sheets, according to “Business Payments Digitization,” a PYMNTS and Corcentric collaboration based on a survey of 400 CFOs.
Get the report: Business Payments Digitization
The same was said by 59% of medium-sized firms ($1 billion to $1.5 billion), 54% of small firms ($750 million to $1 billion) and 50% of the smallest firms ($400 million to $750 million).
Overall, among companies of all sizes, 59% of CFOs said digitization is a very or extremely important strategy for improving balance sheets.
Capitalizing on the Growing Use of Digital Payment Methods
These digitization efforts partly reflect companies’ desires to capitalize on the growing use of digital payment methods throughout the business-to-consumer (B2C) and business-to-business (B2B) markets as digital processes for internal operations complement digital payments from clients.
“At a certain point in the evolution of any business, digitization becomes necessary,” Corcentric President and Chief Operating Officer Matt Clark told PYMNTS in an interview.
Once the pandemic hit the global economy in early 2020, initiatives to digitize payments operations gained new urgency as myriad companies sought to streamline operations and costs to offset the pandemic’s economic fallout.
Because such large numbers of digital payments are streaming throughout the economy, businesses gain more than ever by digitizing their internal payments operations. Because larger companies have the greater transaction volumes, they have the most to gain.
CFOs are also prioritizing improving connections with their sources of working capital and anti-fraud systems as well as improving their ability to capitalize on the current market environment.
Among the CFOs at the largest companies, the factors most often cited as being very or extremely important in creating healthy balance sheets are AR/AP (cited by 99% of these CFOs), asset investments (93%), sources of capital or working capital (61%), fraud reduction (36%) and effective operations management in the current market environment (23%).
Establishing Digital Payments Infrastructures
The decision to digitize payments processes over the past two years has positioned many companies to profit from the pandemic-influenced economy. Many businesses hope to move forward with more efficient and lower-cost payments operations that also allow them to increase their level of interaction with customers and suppliers.
A great deal of economic uncertainty remains about the future, especially one in which the health crisis diminishes, but one thing is certain: The new economy will continue to follow the trends of the past two years and will be powered by a much greater share of digital payments than before March 2020.
Companies that have established digital payments infrastructures inside their finance departments are best prepared to deliver what they need to succeed.
To learn more about how companies from a wide range of industries are using payments digitization to transform their operations, download the report.
At Corcentric, we stand ready to help. To learn how we can help, contact Corcentric today.