Modern Treasury, the operating system for the new era of payments, released survey results from their annual The State of Payment Operations 2023 report showing that legacy payment operations continue to result in high rates of failed payments, slow payments, errors and lost time in finance departments to clean up issues.
Nine in 10 decision makers (90%) say their company “faces problems with payment operations, with the biggest being 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 a low rate of accurate payment reconciliation (23%).”
The Harris Poll survey “conducted for Modern Treasury for the third straight year included 500 companies with 500-4999 employees.”
It also found that:
- 40% of B2B payments fail, which cost time and money to correct.
- 70% of financial decision makers say managing payments takes too long, with 39% saying half of their operations are still manual.
- 64% say their finance team wastes a lot of time on payment operations. On average, teams lose 9 hours a week—time that could be better spent on strategic matters.
As noted in the update shared with CI, most financial decision makers (93%) say “they are likely to invest in payment operations within the next 12-18 months, with half speeding up those plans to counter the current economic climate.”
What do they want most? Shorter payment processing times (55%), “the ability to manage all bank accounts in one platform/system (53%), and automatic reconciliation (51%).”
Faster payment rails are already “changing the dynamics of accounting for money. Six in 10 financial decision makers (60%) use instant payment rails, with another 28% planning to use one in the next 12 months, the survey shows.”
The FedNow instant payment rail, “launched in July, will increase adoption of instant payments.”
When money moves instantly, 24/7/365, companies will “need real-time automatic reconciliation to keep up.”
Having a complete financial view of money movement “across multiple bank accounts is also key, and especially important in the event of a bank failure or reactive market.”
Yet 67% of survey respondents say “it is hard to get that.”
While problems exist, nearly all financial decision makers believe “that automated, faster payment operations would benefit their company in terms of better customer experience (48%), which was cited by more companies this year than in the previous two years, long-term cost savings (44%), greater visibility into money movement (44%), more time to build products (40%), and fewer money movement errors (40%).”