For consumers, the past ten years have seen a clear shift from cash to debit card payments. The business world, however, has long preferred digital payment flows. But important changes are also taking place here. There are now quite a few companies that have cryptocurrencies on their balance sheet and payment processes are increasingly being automated. Time to take stock – where do we currently stand when it comes to business payments? We conducted research among over 300 finance professionals to paint a clear picture.
Difference between SME and large companies
One of the first things to notice is that there is still a considerable difference between SMEs and large companies. Especially when we look at the Days Sales Outstanding (DSO). For more than half (52%) of SMEs, it takes thirty days or more before invoices are paid. While in large companies only a quarter (24%) has to wait thirty days or more before invoices are paid. Fortunately, this has not gone unnoticed in politics. In order to reduce this difference, the statutory payment period for large companies towards SMEs and self-employed persons was reduced to thirty days on July 1, 2022. So hopefully smaller companies will soon be able to count on the same treatment as large organisations. But why then are invoices usually paid so late? The most commonly given reason is that customers themselves have cash flow problems and so simply have difficulty paying the outstanding amount on time.
Paying in 2022
Although organisations have little influence on the above situation, much is being done to get invoices paid as quickly as possible. For example, many organisations use specialised software for collections and reminders. This takes the pressure off financial professionals, allowing them to focus on customer contact and the processes where a human hand is desirable. This also leaves room to find an appropriate individual solution when an invoice is not paid. That already helps a quarter (24%) of companies to get paid on time.
In addition to automating processes, we also see a shift in the way payment is made. Currently, most organisations indicate that iDEAL and direct debits are the preferred payment methods of the customer. Manual transfers have also not yet lost much in popularity. Cryptocurrencies are still not very popular. Only six percent of the organisations indicate that this payment method is currently preferred. This is mainly because there is a lot of uncertainty about this type of digital currency. We still see too many different coins on the market, which are not always equally reliable and are also used for money laundering. This is a market that really needs to mature, with government regulation and only the stable coins will remain.
Is crypto the future?
Because there are also advantages of this means of payment seen by 72 percent of finance professionals. For example, cryptocurrencies offer a certain degree of programmability, which means that all kinds of accounting rules and security measures can be added to payments. Finance professionals also see advantages in the fact that a bank no longer has to play “the middle man” in payments. Finally, crypto-currencies also pave the way for easy international payments. Less time and money is involved, making the step of doing business across the border increasingly attractive.
A future vision where all payments are automatic with digital payments is therefore within reach. However, it is crucial that some steps are taken compared to the situation today. The most important step: levelling the playing field between SMEs and large companies. So that the cash flow at every company can continue to run smoothly, regardless of how payments are made.