In today’s business environment, effective payment methods are crucial.

Outdated payment systems can lead to liquidity problems. Digital payments provide optimized processing, improved operational efficiency and an enhanced customer experience.

The PYMNTS Intelligence Report “Get paid: Digital payments to improve cash flow and customer experience” examined how digital payments are changing accounts receivable (AR) and offered insights into reducing Outstanding debts in days (DSO) and building stronger business relationships.

Outdated payment methods affect AR efficiency

Despite the increasing prevalence of Digital solutionsMany companies still rely on outdated payment methods such as paper checks. This dependency continues to create problems for AR management. According to the report, 75% of companies still use paper checks despite their high costs and inefficiency. Manual check processing results in slower transactions, higher potential for errors, and longer DSO, which negatively impacts a company’s cash flow and financial stability.

The disadvantages of paper checks are evident in industries such as construction, where 76% of subcontractors receive payments by check. This method resulted in huge losses of $273 billion in 2023 due to slow payments. In addition, the costs associated with issuing checks – which range from $4 to $20 per check – exceed the minimum cost of digital transactions, which is around 30 cents per transaction. This discrepancy shows that companies have the opportunity to switch from traditional payment methods to more efficient digital alternatives.

Digital payments reduce DSO and improve cash flow

Switching to digital payment channels can streamline the payment process, effectively reduce DSO, and improve overall financial health. Consider that 83% of businesses consider adopting fully electronic payment processing essential. Digital payments not only speed up transaction times, but also improve payment reliability and accuracy.

The growing preference for digital payments among providers underscores this shift. About 79% of providers prefer digital payments, such as bank transfers. automated clearing house Transactions and virtual cardsdue to faster processing times. Digital payment portals allow suppliers to receive payments easily and securely, and offer features such as supply chain financing and rebates to encourage timely payments. These advancements contribute to better cash flow management and stronger business relationships.

A study from Citizen Financial Group showed that 97% of medium-sized companies that have implemented digital treasury processes have seen improvements in cash flow processing, with 96% noticing better financial transparency and control. This Efficiency is important because 94% of finance departments that use checks plan to move to digital payments within the next five years. Instant payments further improve transaction speed and efficiency, with 77% of midsize companies adopting such methods this year.

Improving the customer experience through digital payments

Digital payments not only prove beneficial for operational efficiency but also strengthen customer relationships, as the PYMNTS Intelligence report shows. B2B transactionsDigital payment options have been proven to increase customer satisfaction and loyalty. 72 percent of business customers are more loyal to companies that offer their preferred digital payment methods, while 91 percent of manufacturers consider real-time payments essential to improving supplier relationships.

For small and medium-sized enterprises (Small and medium-sized enterprises), digital payments are becoming a key competitive advantage. 54% of SMB owners would switch banks for same-day ACH payments. In addition, 90% of SMBs prefer to receive B2B payments electronically and 78% are opting for electronic payroll. The increasing use of artificial intelligence in payment systems underscores a broader trend toward digital transformation.