38% of CFOs Accelerated Payments Digitization to Improve Balance Sheets 

Payments digitization is playing a key role in chief financial officers’ (CFOs’) broader strategies for improving their organizations’ financial health. In fact, 38% of CFOs say they have accelerated payments digitization with the express intention of improving their balance sheets, according to “Business Payments Digitization,” a PYMNTS and Corcentric collaboration that surveyed CFOs from organizations generating between $400 million and $2 billion in annual revenue. 

Get the report: Business Payments Digitization: A Path To A Better Balance Sheet 

The CFOs are making these moves as corporate balance sheets are still reeling from the pandemic slowdown. While the economy is slowly recovering, businesses accumulated record debt in the months following March 2020. The CFOs tasked with helping their organizations weather this storm are doing more than restructuring and paying back debt. Many have also implemented digital innovations that will enable long-term improvements to their organizations’ payments operations. 

Indeed, 71% of the CFOs included in the PYMNTS study said they have accelerated their payments digitization efforts during the 18 months since March 2020. Nearly all firms are making and receiving payments via cash or checks less often and receiving digital payments more often than they were before the pandemic. 

Largest Firms Lead the Way 

CFOs of the largest firms included in the study — firms generating between $1.5 billion and $2.0 billion in annual revenue — are most likely to say they accelerated their payments digitization to improve the balance sheet, with 40% citing that as the reason. That was also the reason cited by 36% of the CFOs at organizations generating between $1.0 billion and $1.5 billion in annual revenue, 36% of those at organizations generating between $750 million and $1.0 billion, and 39% of those at organizations generating between $400 million and $750 million. 

Finance and insurance firms and healthcare or medical firms have led the way in digitizing to improve their balance sheets. Forty-eight percent of the CFOs in both industries said they accelerated payments digitization to improve their balance sheets. CFOs in other industries included in the survey were less likely to say that’s the reason, with 39% of those in travel and transportation, 36% of those in retail trade, and 19% of those in industrial or manufacturing saying they accelerated digitization to improve their balance sheet. 

Firms Of All Sizes Report Improvements 

The CFOs from businesses that have invested in more digital payments operations believe these efforts will result in stronger, healthier balance sheets, whether that means having improved in working capital, streamlined accounts receivable (AR) and accounts payable (AP) processes, or improved customer and partner satisfaction. 

Digitization has been instrumental in improving firms’ payments efficiency and working capital, both of which they see as integral to balance sheet health. Ninety-one percent of CFOs say digitization has improved their payments efficiency, and 84% report improvements in working capital because of digitized payments flows. These improvements are seen among all firms, regardless of size. 

Respondents report that digitization has also improved firms’ data security, supplier relationships and fraud detection. The largest firms have seen their data security, supplier relationships and anti-fraud operations improve the most because of payments digitization, while smaller firms are more likely to cite cost reduction as a benefit that they have seen because of payments digitization.