Potential of the digitalization of financial processes in German SMEs

German SMEs face a dual challenge: On the one hand, the pressure to digitize is growing – driven by rising customer demands, a shortage of skilled workers and new, digitally based business models.

German SMEs face a dual challenge: On the one hand, the pressure to digitize is growing – driven by rising customer demands, a shortage of skilled workers and new, digitally based business models.

On the other hand, the hurdles are high: Limited resources, a lack of know-how, and a complex regulatory landscape are holding many companies back. Yet, small and medium-sized enterprises (SMEs) are the backbone of the German economy: Around 99 percent of all companies are SMEs. Their ability to implement digitalization is crucial for Germany's competitiveness.

Digitalization offers significant potential for improvement in financial processes. These processes are relevant to all companies, regardless of industry or size, and act as a key lever for increasing efficiency. Financial processes are often standardized and recurring – from invoicing and payment processing to accounting – and therefore offer ideal opportunities for automation. Automated internal processes can not only increase productivity but also free up valuable personnel resources – a crucial factor in times of skilled labor shortages. Furthermore, policymakers are increasing the pressure on companies to act: Since the beginning of 2025, companies have been required to be able to receive e-invoices, and at the same time, payment options are to be strengthened: In addition to cash payments, at least one digital payment option must always be offered, thus becoming commonplace in everyday transactions.

The study shows that the finance department in medium-sized businesses is already comparatively highly digitized, with a digitization level of 82 percent – ​​higher than other business areas. However, the use of individual financial tools varies considerably. While digital business accounts (86 percent) and financial management software (73 percent) are widespread, technologies such as payment terminals or e-invoicing lag behind. The gap is particularly large when it comes to innovative solutions such as big data analytics tools, which are currently only used by around a quarter of companies.

These technologies and solutions can serve as a foundation and bridge for further digitization of internal processes. The introduction of standardized e-invoices or the use of payment terminals creates the basis for the automated processing of financial figures and therefore offers great potential for companies.