2021 Business Payments Barometer

Cash management in the new working environment

It’s no surprise that in the light of everything, receiving money has become more important than ever for organisations of all sizes, especially small (67%) and large (72%) businesses.

As receiving cash quickly became a top priority over the last year, businesses began to understand the situation we were in, which is why 2 in 3 businesses were willing to re-negotiate payment to help manage cashflow in light of COVID-19. However, this isn’t the case across every sized business. While medium, large and enterprise are willing to take this approach, small businesses are less likely, with only 1 in 2 agreeing.

68% of businesses say receiving money quickly has never been more important

In an uncertain landscape, never has the term “Cash is king” been more key to business operation. But, when such a large number of businesses are struggling to provide accurate forecasts regarding their cashflow, how can they be sure what’s in the bank? 1 in 3 businesses is still manually managing cashflow forecasts in Excel.

This surprising figure includes enterprises, with 1 in 4 still using excel there’s a worry about whether businesses truly understand their financial position, which right now seems to be on the top of everyone agenda. There is a clear opportunity for growth for every size of business in this space.

Access the ungated report directly to understand how to apply this insight directly to your business and understand how cashflow management is expected to change over the next 12-months.

The impact of COVID and Brexit on fraud 

The challenge of fraud risk continues. Depressing but true: as businesses shift to working from home, the scammers are coming out of the woodwork. Around half of the businesses surveyed saw an increase in insider fraud and collusion, driven mostly by the large (57%) and enterprise (53%) sized businesses.

Fraudsters often take chance of every opportunity. However, it’s not all bad news. On the whole there’s been a decrease in fraud across the board for small, medium and large businesses.

Almost 1 in 2 businesses have seen an increase in insider fraud and collusion in the working from home environment.

There is, however, evidence that organisations are stuck in a loop. While this year might be good news for those sized businesses, it isn’t good news for enterprises, who are facing an all-time high with fraud losses being 20% higher than last year. The only effective way of mitigating evolving fraud risks will be to break this cycle and to truly understand the impact of fraud protection techniques. 

As we look back on the 2020 Business Payments Barometer, businesses were putting tools in place to help protect them from fraud, with 57% of businesses using bank validation. This year this figure dropped to only half of businesses surveyed validating bank data. The new working from home environment meant a fast switch in how businesses were not only run, but how they made payments meaning not all protection measures were continued in the new working from home environment. But, could this have resulting in an increase in fraud? One thing is for certain, the fraudsters took advantage of this situation.

Regulation and Industry initiatives are still falling behind

2020 catapulted business change and digitization years ahead of projections. But, did this filter through to the world of payments? In the 2020 payments Barometer, financial-decision makers highlighted easier access to technology as their biggest positive driver of change.

This year we’re seeing large businesses embrace the change upon them by being the most likely sized business to accept new payment types. 

Payment innovation should be a win-win for organisations and consumers alike.

20% of small companies are unaware of any of the upcoming payment initiatives.

Around 1 in 6 of businesses surveyed have begun to introduce instalment or buy-now-pay-later solutions. The question is, are businesses making the most of innovation in the industry through regulation and initiatives to enhance their offering?

Actually, since 2019 the Business Payments Barometer has highlighted a decline every year in preparedness for payments regulation and that continues this year. Given that the regulations are created in the industry to address fraud and support businesses with cashflow and cash management – the core of challenges highlighted by businesses this year - this becomes problematic from both a regulatory and business perspective.

Businesses are quite often put off by jargon associated with new regulation and initiatives which could possibly highlight why only one third of businesses who listed regulatory changes as a key driver of change see them in a positive light.