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70% Of CFOs Believe Customer Relationships Rests On AR/AP Digitization

The pandemic’s disruption to the global economy clarified how important it is for chief financial officers (CFOs) to think strategically, particularly concerning business strategies that keep companies connected with their customers.

For starters, the pandemic hastened the adoption of digitization throughout corporate financial operations. This digitization is speeding up payments and helping companies strengthen their customer relationships. Digitizing payment processes is assisting many organizations in continuing to operate smoothly with lower operating costs while ensuring that they are meeting customer demands.

PYMNTS’ findings explain how CFOs view the pandemic as an opportunity to rethink their processes and workflows, and many of the investments in digitization during the past two years have been determined by how CFOs want to reorganize these operations.

In The Strategic Role Of The CFO Playbook: How AP And AR Digitization Are Supporting Customer Growth And Increasing Value, a PYMNTS and Versapay collaboration, PYMNTS assesses how the digitization of payments processes is helping companies enhance customer relationships, gain clients and revamp business strategies.

We surveyed 400 CFOs in March and April 2021 to provide a firsthand account of how businesses are investing in digital accounts payable and accounts receivable innovations to accelerate their cash flows. Participants hailed from United States-headquartered businesses across 18 sectors that generated at least $25 million in annual revenue.

PYMNTS’ research found that 62% of survey respondents cited two goals that have increased in importance during the past 18 months. One goal is to oversee projects with significant financial implications and the second is to emphasize strategic issues that could potentially shape an organization’s long-term future.

Most CFOs say their interest in increasing customer value has grown since the pandemic’s onset. Our findings underscore that business leaders are using the pandemic to rethink operations and develop strategies for how their companies should run as aspects of the crisis ease and the economy settles into a more predictable pattern. CFOs are playing a fundamental role in these efforts.

Smoothing out and speeding up financial processes can help companies improve their operations’ responsiveness to customers. Seventy percent of CFOs say they are trying to increase customers’ overall lifetime value by making accounts receivable/accounts payable (AR/AP) more transparent, and 62% hope to increase customer value by making AR/AP more efficient.

With such an intense focus on digitization initiatives during the pandemic, it is understandable that 96% of CFOs say the main reason they are digitizing AP/AR functions is to benefit customers and vendors. This goal outweighs other justifications, such as speeding up processing, saving costs and keeping up with competitors.

The pandemic prompted CFOs to refocus their systems on lowering costs and improving efficiency.  Much of this has been realized through integrating AR/AP systems, seen by 83% of CFOs as one of the digitization process’s chief benefits. Digitization’s other benefits include improved payments security — which 61% of CFOs expect — and faster receipt of customer payments, expected by 53% of CFOs.

The findings clarify that the increased digitization of payments processes is giving CFOs opportunities to improve customer experiences.

More than half of CFOs say the AR/AP digitization they have implemented since the pandemic began has let them increase the volume of payments processed via methods such as the automated clearinghouse (68%), PayPal (64%) and credit cards (64%).

Digitization is speeding up customer payments and helping companies improve their cash flow. At the same time, many companies expect the digitized processes to improve customers’ experience and help them build deeper relationships with key clients for the long term. As this process plays out, CFOs anticipate that more revenue will be generated over the life of these customer relationships.

To learn more about the steps chief financial officers are taking to digitize their accounts receivable and accounts payable operations to improve efficiency, accelerate cash flows and improve customer relationships, download the report.

About the Report

The Strategic Role Of The CFO Playbook: How AP And AR Digitization Are Supporting Customer Growth And Increasing Value, a PYMNTS and Versapay collaboration, explains how businesses are investing in digital accounts payable and accounts receivable innovations to accelerate their cash flows and improve customer relationships.

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