Mid-sized companies are more likely than enterprises of other sizes to say they want digital technology to transform the way they operate, but they’re also more likely to say they don’t have the resources to do it.
About 93% of mid-sized companies, or firms generating $25 million to $100 million annually, consider accounts receivable (AR) and accounts payable (AP) digitization to be mostly about transformation, a PYMNTS study found.
One mid-sized company from the wholesale trade industry that had already updated its AR and AP systems reported that digitization has provided their company with a wide variety of payment- and transaction-related options: “Our processes are now faster and more accurate.”
Another mid-sized company replying to the survey said, “Deploying a multichannel support system made the process much easier and simpler for our staff to address customer queries.”
In contrast to mid-sized companies, a majority of firms of other sizes said digitization is about automation rather than transformation.
Barriers to Digitization
Despite their desire to transform their business, 60% of mid-sized companies said they lack the IT resources to digitize their AR and AP systems, according to the PYMNTS study, The Strategic Role Of The CFO Playbook.
Fewer than half of the firms of other sizes reported that insufficient IT resources was a barrier to digitization.
Mid-sized companies also reported several other barriers to digitization, including a need for infrastructure support (55.3%), digital competencies among staff (42.7%), problems from other areas (38.7%) and problems integrating across functions (38.5%).
Barriers mentioned less frequently by mid-sized companies are difficulty with pinpointing problems, reduced revenues or profits, workforce morale problems, problems communicating with customers and reduced customer satisfaction.
Robust Digital Capabilities
Although mid-sized companies face these challenges, PYMNTS reports that firms of this size are bringing robust digital capabilities to their accounting operations to drive efficiency and accelerate cash flow.
“Streamlined processes save us time, which helps us in focusing on other important areas of the organization,” said a mid-sized company from the real estate industry.
Learn more: The Strategic Role of the CFO
Among the mid-sized companies replying to the survey, 95.3 percent said their motivation for digitization was to benefit customers and vendors. More than half of them also cited a desire to automate a manual process, provide more transparency and provide more efficiency.
Achieving these goals is achievable for mid-sized companies because of the ease of use offered by state-of-the-art digital accounting and payment technologies.
Leading digital AR and AP technology providers offer cloud-based, collaborative platforms that minimize the need for on-premises technology. These platforms also feature intuitive interfaces that integrate easily with existing enterprise resource planning (ERP) and accounting systems.
Mid-sized companies may wield an important advantage over larger firms in taking on this process, since the volume of accounts they handle is far more manageable.
With cloud-based digital AP and AR platforms, digital payment and account management capabilities that were once solely held by big companies are now accessible to mid-sized companies.
By implementing them, mid-sized companies can achieve the transformation they want and can better serve their customers and vendors.
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