More than half of Australian businesses struggling with payment innovation have severe concerns about near-term survival, according to research released by American Express.
The research found 59 per cent of companies yet to widely modernise payment practices were at significant risk of failing in the next three years, while another 19 per cent were at moderate risk of collapsing.
The American Express Payment Revolution research revealed that about half of all Australian businesses struggled with making payments to suppliers (44 per cent) or receiving payments from customers (48 per cent).
The Payment Revolution research included a survey of 355 Australian chief financial officers from businesses with yearly revenue values of between $2 million and $300 million from 15 different industries. One third of these businesses were unable to reconcile supplier invoices at least every other month.
The survey found at-risk businesses were struggling with archaic financial processes, increasing payment volume, and concerns about issues such as security and regulation.
About a third of surveyed businesses were still yet to widely modernise their payment approach to managing payments, with only 22 per cent moving to a completely automated system. These businesses were much more likely to suffer from issues such as cashflow problems, accessing capital and customer retention.
American Express Australia Vice President for Small & Medium Enterprises Martin Seward says it’s critical that these struggling companies change their approach to payment.
“We are approaching a financial event-horizon for many Australian businesses,” he said. “The research tells us they can’t sustain this outdated approach to managing payments much longer.
“The most alarming part is that the Payment Revolution research shows that a lot of this concern is avoidable. Companies that push through changes to payment processes not only survive – they thrive.”
The Payment Revolution research found businesses that embraced emerging payment technologies were almost twice as likely to pay suppliers on time, more than twice as good at managing cashflow, and three times better at processing payment than other businesses.
These early adopters were also almost twice as successful at customer retention as those with poor payment practices, and they expected to see a business-revenue increase of 20 per cent or more during the coming year.
