This referenced posting is at CPA Practice Advisor and takes yet another angle on the impact of less than optimal cross-border payments capabilities. The piece references a survey commissioned by Flywire, the Massachusetts fintech that specializes in payments enablement in cross-border scenarios.
So any financial process that slows down the cash collections cycle will have some level of negative consequence on a business, as we have especially seen during the pandemic. Generally speaking, the smaller the business, the greater the relative consequence since cash availability can be a daily concern.
This piece expands that concern into a broader impact insofar as those businesses seeking to expand into foreign markets have key payment collections hurdles to overcome, therefore need to gain more digitization of receivables to help compensate.
‘As the global economy becomes more “borderless,” one of the hardest things for businesses to do when expanding internationally is getting paid. In fact, a new survey of finance professionals commissioned by Flywire, a global payments enablement and software company, found that complexities with collecting cross-border payments is impacting their ability to scale their business internationally. Furthermore, 9 out of 10 respondents who have a role in handling the inbound payments at their companies said global expansion efforts could accelerate if businesses could deal with foreign exchange rates in an easier way. These same respondents report revenue loss due to operational inefficiencies with receivables processing.’
We have been discussing this cash cycle modernization requirement for some time now, and this indicated survey (summarized through a link in the article) provides further evidence that those who manage a company’s financial operations have a pretty clear opinion about what can and should be done to not only patch it up, but fundamentally alter the end-to-end methods by which companies pay and receive payments. More fuel for the fire.
‘“Finance professionals are increasingly tasked to do more with less; however, they often spend time on the wrong things, such manual reconciliation of payments, shoring up the security of their systems, or dealing with compliance issues,” adds Frere. “By embracing modern technology that automates the payments process with greater visibility into FX rates and receivables, finance professionals can spend more time focusing on optimizing the bottom line and strategically growing their business internationally.” Flywire’s complete report can be found here.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group