This release is about results from a survey conducted by MineralTree, a payables automation fintech based in Cambridge, Mass. The survey covers AP trends for the middle market, and is the fifth consecutive year that it has been conducted. Readers can link out and download the report or just read the summary points in the release.
‘…a survey of over 1,300 finance executives and professionals in the middle market. The research looks at key trends, challenges, and opportunities in accounts payable operations…Annual B2B payment volumes in the US are estimated at approximately $25 trillion. The related business processes can be complex and high invoice volumes supported by under-staffed finance teams and manual methods can create significant operational challenges for middle-market companies. Each year, MineralTree looks at the progress middle-market companies are making in transforming their payable operations to overcome these obstacles and gain new business efficiencies and competitive advantage.’
As Mercator Advisory Group has been advising members for some time, the pace of a digital payments shift has been steadily growing, moving away from checks to various other tools, including ACH and virtual cards. In addition to changing the payment tools, automation of some (or all) parts of the payables process is also a more frequent occurrence, given the wide availability of solutions, something that we have also called out often. Based on discussions we have been having during the past three months, as well as various other sources, the pandemic has further accelerated this trend, both in practical terms as well as the level of ambition to change. Some findings from the survey are as follows:
‘The use of electronic payment methods continues to accelerate dramatically.
● 91% of the businesses surveyed used payments cards at least once to make payments vs. just 51% a year ago. 80% made ACH payments at least once vs. 62% a year ago.
● The total mix of electronic vs. paper-based payments continues to shift. Businesses report paying 56% of their invoices electronically and 44% via paper vs. 52% and 48% respectively a year ago.
● They also report significant advantages as a result of moving to electronic payment methods—improved security, simplicity, and big cost-savings vs. paper checks.’
The release goes on to summarize some other points around fraud and costs savings and so forth, but in order to have a closer look, we’d recommend reading the full report. Since the survey was completed prior to the effects of the pandemic, the company re-contacted responders in mid-March to get some brief feedback on adaptation.
Here are a couple of points that are probably not too surprising to folks in payables now that we have all been dealing with this for 3.5 months:
‘Manual AP processes make remote work difficult for many involved in payables operations
● The coronavirus crisis has created challenges for finance teams related to their ability to work remotely.
● 43% of respondents report still needing to go to the office in some capacity to perform their job.
● Of those, 29% reported not being productive or as productive as they had been prior to the pandemic.’
Get in touch with Mercator Advisory Group if you wish to discuss the survey results further.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
