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More than 4 in 5 Companies Struggle with Payment Operations, New Research from Modern Treasury Reveals
One third of payment operations still manual at companies with 500-5000 employees.
SAN FRANCISCO — More than four in five companies (84%) face payment operations problems such as slow payments, a high rate of payment failures, returns and refunds and data quality errors, all of which result in wasted time for finance teams, indicate the results of a first-of-its kind survey released today by payment operations software provider, Modern Treasury.
“Money movement is the lifeblood of any business and this study shows that companies struggle to make payment operations simple, scalable, and secure”
The Harris Poll survey was conducted online on behalf of Modern Treasury in August and September 2021 among 300 U.S. finance decision makers at companies with 500 to 5000 employees. It indicates pain points exist throughout the payment operations process. Payment operations involves managing the entire cycle of money movement, from initiation and approvals to reconciliation and reporting.
Nearly 1 in 2 decision-makers (48%) say their company experiences reconciliation issues at least half the time when making or receiving payments. More than two in five struggle with incorrect payment approvals (42%), returns and failures (41%). More than three in five (61%) say managing payments takes too long. Nearly one in four (23%) cannot close books as fast as they want because of payment operations problems. More than four in ten (44%) say the ability to update the general ledger automatically would be a helpful upgrade to payment operations.
“Money movement is the lifeblood of any business and this study shows that companies struggle to make payment operations simple, scalable, and secure,” says Dimitri Dadiomov, Modern Treasury CEO and co-founder. “Unlike consumer payments, business payments have lagged in terms of innovation. That’s now changing and companies, large and small, that automate payments using modern software and APIs will see big gains in finance team productivity, faster payments, reduced risk, fewer errors, better customer service and greater insight into finances.”
One negative impact of less than optimal payments operations means finance teams spend more time resolving payment issues instead of focusing on higher-value strategic work. Companies that lack full clarity into their finances may also be slower to respond to rapidly changing market conditions.
Other survey highlights include:
- Less than half of the companies making payments to other companies--the lion's share of money movement in the U.S.--say their current payment operations are efficient (47%), user friendly (45%), automated (36%) or simple (34%).
- Almost 6 in 10 (58%) of senior finance decision makers say it is hard to get a complete financial view of their company with their current payment ops system.
- Half (51%) say their finance team wastes a lot of time on payment operations. Financial decision makers say they lose eight hours, on average, in a week dealing with payment operations issues such as failures, returns and incorrect approvals.
Modernizing Payment Operations
More than one-third (nearly 34%) of payment operations are still manual, the survey found, which can lead to slower processing and more errors.
The good news is that all financial decision makers (99%) think upgrades to payment operations would be helpful. More than 4 in 5 (81%) say their companies would benefit from modernizing payment ops in terms of increased speed, flexibility and transparency with money movement. Specifically, companies want automatic reconciliation, the ability to manage all bank accounts in one system and shorter payment processing times, the study found.
Also, 88% of finance leaders said automating payment operations would allow finance teams to spend more time on strategic matters such as cashflow planning, business analysis and vendor management.
Modern Treasury, founded in 2018, automates every step of the payment operations process. Its customers now reconcile over $2 billion per month using its platform, representing over 20x growth year over year. Modern Treasury recently received $85 million in new venture funding, which pushed its valuation above $2 billion.
About Modern Treasury
Modern Treasury provides payment operations software for companies, enabling teams to move and track money with confidence. Our tools automate the full cycle of money movement—from payment initiation, through approvals, to reconciliation. Using Modern Treasury products, innovators are reinventing the way businesses are built, run, and scaled. We are a catalyst for growth in the economy's most important sectors, from real estate and healthcare to education and financial services. Founded in 2018, San Francisco-based Modern Treasury is backed by Altimeter Capital, Benchmark, and Y Combinator. For more information, visit https://www.moderntreasury.com/.
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