Here on the other side of the pandemic, industry verticals that are modernizing through digital payments transformation are seeing the payoffs across functions including accounts payable (AP), accounts receivable (AR), and a host of other critical areas.
Examined in the study “Digital Payments Technology: Investing in Payments Systems for the Digital Economy,” a PYMNTS and Corcentric collaboration, and based on a survey of 250 chief financial officers (CFOs) at retailers and manufacturers, we see that reasoning revolves around achieving new goals.
We found that 57% 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 37% of manufacturers and 20% of retailers say the most important reason for investing in working capital and credit systems is to modernize them.
Our research found that 38% of manufacturers and 53% of retailers say their most important reason for investing in digitized working capital and credit systems is to reduce the cost of operating them. But as we also found, compared to investments in other areas of payments and finance, working capital investments were more likely to be short-term projects that companies soon abandoned, with 44% of companies that invested in working capital applications terminating investments in at least one of these areas.
Payments are also a primary reason for modernizing. Per the survey, 77% of manufacturers and 47% of retailers say the most important reason for investing in improvements to AP systems is to improve the payment process. Also, 48% of manufacturers and 54% of retailers say the most important reason for their investments in AR systems is to improve the payment process.
The study concludes that “Many companies are carrying out technology investments with more precise objectives, such as lowering the cost of payments processes or modernizing them. The experience demonstrates that businesses are assessing their position within the economy’s digital shift and determining how technology investments can drive their success as consumers and companies operate more and more in the digital realm.”
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