INDEPENDENT NEWS

Businesses still struggle to cut out paper

Published: Thu 15 Oct 2015 09:54 AM
15 October 2015
Deloitte report: Digital B2B payments help rid businesses of red tape, but some still struggle to cut out paper
Digital payments provide considerable benefits to New Zealand organisations, but many have yet to make the switch to realise the potential.
Deloitte surveyed 150 medium and large organisations (67% in Australia and 33% in New Zealand) to ascertain key B2B payments metrics and trends.
The results published today in the report, ‘B2B Payments: 2015 Australia and New Zealand Research’ indicate that card and digital account-based payment mechanisms are typically considered better, faster and cheaper by organisations that use them.
Richard Miller, Payments Director with Deloitte said: “Banks, payment technology companies and fintechs are increasingly working together to bring digital solutions to market to improve the whole process of making or receiving payments.”
He said that new technologies, often brought to market initially by innovative fintech companies, are changing the way payments are being made and received.
“These card and digital account payments can be more than 70% more cost effective than a traditional purchase order process, particularly when you consider the downstream benefits such as better data for analytics and reporting (reported by 63% of buying organisations), improved cash flow (73%), and reduced manual work through process automation (74% reported reduced approvals and 68% experienced a reduction in administration).
“Businesses and government organisations are increasingly looking to such digital solutions to improve productivity and reduce the time between invoicing and receiving payment,” Miller said.
“Eighty two percent of survey respondents reported that cards were faster and a very efficient way to streamline the overall procure-to-pay workflows, increasing the average speed of cards over traditional processes by 1.4 times.
“And when it comes to being paid, 73% of the survey respondents rated faster payment as an important benefit of accepting cards, with 49% saying that cards reduced the cost of doing business.”
One respondent said: “It’s great for cash flow and it’s great for us: less paperwork, less mistakes in the process, better reporting.”
Users are shifting away from thinking of cards just as a tool for managing employee expenses, to realising the potential of digital payment and reporting solutions. Sixty one percent of suppliers responding reported spending less effort in chasing payments, 60% claim better customer relationships, and 51% post improved reconciliation.
Miller said: “These virtual accounts and payment platforms mean that a traditional card account can be used for a greater range of B2B payments. As a result of digitisation opening up more opportunities, spending on card-based B2B payments has grown significantly since 2011 (up 42% in Australia and 66% in New Zealand).
“However, there is still considerable opportunity to improve take-up, with almost half of survey respondents (47%) not using the available solutions and 100% still having paper processes to support cheque payments.”
According to Visa, a key technology partner for banks across the region and sponsor of the Deloitte report, the future is about digitising processes and creating an integrated view across a portfolio of mechanisms, often through innovative tools developed by fintechs.
Rob Walls, Head of Product for Visa in Australia, New Zealand & South Pacific explained that along with its bank clients, Visa also sees new partnerships as crucial to future growth in financial services. “Visa’s role is to set the conditions for our clients to innovate. Our belief is that innovation can come from anywhere, which is why securely opening our network and partnering with the fintech community is so important.
“B2B payments are rapidly changing as the shift to digital accelerates. There is still substantial opportunity for businesses of all sizes to adopt more efficient ways to pay and be paid,” said Walls.
More about the survey:
• Of the 150 organisations surveyed, 90% were large commercial businesses and 10% were public sector organisations
• The survey included a roughly equal split of users and non-users of cards
• The survey was conducted by Deloitte in 2015
• It focused on both buyers and suppliers
• 100 of the respondents were based in Australia and 50 in New Zealand
• The median revenue/budget was A$67m in Australia and NZ$65m for New Zealand
• Median company size was 610 employees
• The top industries represented in the private sector were Agriculture, Mining & Construction, Manufacturing, and Wholesale & Retail Trade
• The primary responding individuals were Chief Financial Officers, Accounts Payable Managers, Procurement Managers, Shared Services Managers, and Finance Directors.
To read the full report, please click here.
ends

Next in Business, Science, and Tech

General Practices Begin Issuing Clause 14 Notices In Relation To The NZNO Primary Practice Pay Equity Claim
By: Genpro
Global Screen Industry Unites For Streaming Platform Regulation And Intellectual Property Protections
By: SPADA
View as: DESKTOP | MOBILE © Scoop Media