In today’s rapidly evolving business landscape, firms are increasingly embracing digital advancements that can transform working capital management, streamline their accounts receivable (AR) and accounts payable (AP) systems and bolster their fraud prevention efforts.
This shift, which spans across various sectors, is driven by the ongoing digital transformation and the need to adapt to the changing economy.
In “Digital Payments: A Changing Economy Sparks New Priorities for Systems Spending,” PYMNTS Intelligence draws on insights from a survey of 250 CFOs to examine the investments retail, healthcare, manufacturing and finance/insurance businesses made in digital payments technology in the last three years — first in response to the pandemic, and subsequently to align with the ongoing digital shift.
Findings detailed in the joint PYMNTS-Corcentric study show that retailers and manufacturers have been at the forefront of investing in digital technology during the pandemic, with a particular emphasis on improving systems like working capital management, procurement, AR and AP. On the other hand, healthcare companies and finance and insurance businesses were more likely to invest in their AP systems.
CFOs are also planning to make further digital investments in payment processes and procurement systems. In fact, more than 90% of CFOs anticipate a global recession within the next year, and this economic uncertainty is driving investments in improving AR, AP, working capital and procurement systems as businesses seek to navigate the uncertain economic landscape.
When it comes to working capital, 44% of finance and insurance companies, along with 46% of retailers, 40% of manufacturers and 34% of healthcare companies, are earmarking investments in digital technology with the aim of enhancing their working capital management.
In addition to working capital, companies are also making upgrades to their AP and AR systems. Fifty percent of healthcare and manufacturing companies, as well as nearly 55% of retailers, are planning to invest in AP systems. The surveyed companies are also focusing on digital investments in fraud prevention and risk management, with a significant share investing in this area.
The overarching goal for businesses is to modernize their payment operations, reduce costs, optimize remote workforces and expand their businesses through digital advancements.
Consequently, the recognition of the importance of digital improvements in AR, AP and working capital systems to enhance payment processes and gain a competitive advantage is driving this investment trend. And as the digital shift continues and economic uncertainty persists, businesses are expected to prioritize these digital improvements to ensure their long-term success.