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Data Brief: 92% of SMBs Digitizing AR and AP Processes 

Much is made of the great digital shift, where consumers have pivoted away from checks and cash to embrace digital channels in order to conduct daily financial life.

Enterprises, too, have been makings strides away from the “paper chase,” and have been busy digitizing their own operations in a bid to cut costs and reduce manual tasks.

In the “Strategic Role of the CFO Playbook,” done in collaboration between PYMNTS and Versapay, more than 400 chief financial officers at firms with at least $25 million in annual revenues said that B2B is due for an overhaul. The traditional dynamics of the buyer/supplier relationships, and the inherent friction points, must be addressed in ways that address payment delays. As many as three-quarters of businesses with revenues between $25 million and $100 million said that late payments have been exacerbated due to the pandemic. Increased days outstanding also has been a problem for 60 percent of smaller firms, the study found.

See also: The Strategic Role of the CFO

And yet the reliance on checks is in stark relief. Roughly a quarter of all B2B payments – cutting across the size of the paying firms – are done via check.

There has been some shifting in the frequency of payment methods. The study found that roughly two-thirds of respondents had been making regular ACH payments more frequently. And at the same time, more firms said they were relying on check-writing “less frequently” than those who said they’d increased those activities. In other words, there’s some hope for a shift to new, electronic means of paying invoices and getting them paid. Roughly 92 percent of smaller firms said they are digitizing at least some aspects of their accounts receivable and payable processes.

See also: The Strategic Role of the CFO

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