Modern Treasury, the operating system for the new era of payments, has released the results of their annual report, The State of Payment Operations 2023. The survey reveals that outdated payment operations continue to cause issues such as failed payments, slow payments, errors, and wasted time in finance departments.
According to the survey, 90% of decision makers report problems with payment operations. The most common issues include payment reconciliation taking too long (32%), lack of real-time insight into cash balances (31%), high rate of payment failures (27%), data errors (26%), and low accuracy in payment reconciliation (23%).
The survey conducted by The Harris Poll included 500 companies with 500-4999 employees, and also found that 40% of B2B payments fail, resulting in additional time and money needed to correct the errors. Additionally, 70% of financial decision makers believe that managing payments takes too long, with 39% stating that half of their operations are still manual.
Furthermore, 64% of respondents mention that their finance team wastes a significant amount of time on payment operations, losing an average of 9 hours each week. This time could be better spent on strategic matters.
The survey highlights that 93% of financial decision makers are likely to invest in payment operations within the next 12-18 months. Half of them are accelerating these plans to counter the current economic climate.
When it comes to the desired improvements, shorter payment processing times rank highest, with 55% of respondents indicating this preference. Additionally, 53% want the ability to manage all bank accounts in one platform or system, and 51% desire automatic reconciliation.
Interestingly, the survey shows that faster payment rails are already having an impact. Six in 10 financial decision makers are already using instant payment rails, with an additional 28% planning to adopt them within the next 12 months. The introduction of the FedNow instant payment rail in July is expected to further increase the adoption of instant payments.
With money moving instantly, companies will require real-time automatic reconciliation to keep up. It is also crucial for companies to have a complete financial view of money movement across multiple bank accounts, especially in the event of a bank failure or reactive market. However, 67% of respondents find it difficult to get this comprehensive view.
Despite the existing challenges, nearly all financial decision makers believe that automated and faster payment operations would benefit their companies. The benefits cited include better customer experience (48%), long-term cost savings (44%), greater visibility into money movement (44%), more time for product development (40%), and fewer errors in money movement (40%).
Follow crowdfundingmagazine on Instagram: @crowdfundingmagazine_it