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Small Businesses are More Worried About Financial Process Inefficiencies and Cash Flow:

By PaymentsJournal
May 28, 2021
in Accounts Payable, Commercial Payments, Merchant, Small Business, Truth In Data
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Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Mercator Advisory Group’s Report: Businesses Need Receivables Automation to Keep Cash Flow Positive During the Pandemic Recovery

Small Businesses are More Worried About Financial Process Inefficiencies and Cash Flow:

  • More small businesses were worried about financial process inefficiencies in 2020 than in 2019.
  • In 2020, 45% of small businesses agreed they rely too much on non-automated processes for payables, receivables, inventory, and payments, compared to 43% in 2019.
  • In 2020, 49% of small businesses agreed that keeping track of payables, receivables, inventory, and payments is a worry that limited their growth, compared to 42% in 2019.
  • In 2020, 48% of small businesses were worried about cash flow, compared to 40% in 2019.
  • Despite the increased worry, many companies have plans to grow their business. 
  • In 2020, 60% of small businesses reported having plans to actively grow their business in the future.

About Report

Automating the systems and processes that encompass corporate accounts receivable has been climbing the priority list in the pandemic era as financial executives increasingly see how end-to-end digitalization can have a positive effect on the cash cycle. In a new research report, Businesses Need Receivables Automation to Keep Cash Flow Positive During the Pandemic Recovery, Mercator Advisory Group reviews the impact of the pandemic on corporate cash flow and the key pieces of integrated receivables that have been gaining intense focus for modernization projects. The growth in digital payments over the past several years has been steady, but since the early months of the pandemic, there has been a pivot towards longer term payments digitization across the spectrum of effort that encompasses the cash cycle and can provide better working capital effectiveness.

“The early-on impact of lockdowns and travel restrictions placed a heavy emphasis on getting payments out electronically, which then set off light bulbs on the receivables side as financial operations had to adjust and consider the longer term implications of manual process elimination,” commented Steve Murphy, Director of Mercator Advisory Group’s Commercial and Enterprise Payments Advisory Service, and author of the report. “Reviewing payments as an end-to-end continuum provides benefits to buyers and suppliers, by leading to a convergence of the systems and processes that make up financial operations. Forward-thinking banks and their clients are now taking a closer look at supporting receivables modernization as part of overall digitization projects,” added Murphy.

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Tags: Accounts PayableAccounts ReceivableCash flowManual ProcessesPayables AutomationSmall BusinessTruth In Data

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