The statistics from last week come bearing more bad news for small businesses, but this time, the data may signal how that bad news will have a spillover effect on large corporations. New forecasts also highlight the lucrative future of the blockchain, but cash flow problems may prevent businesses large and small from living long enough to see a world where blockchain technology transforms the world of payments. We break down all of the statistics below.
The percentage of small suppliers who told APQC researchers that they will likely have to exit the market because they are still getting paid on later terms by their corporate buyers.
Late payments is a fact of life for suppliers, but especially since the 2008 financial crisis, it’s a problem that has yet to see improvement. In fact, some analysts say it’s getting worse, and APQC’s research, published last week, seems to agree.
Analysts at the firm called the situation “disturbing” and “dire” and one that will come back to bite late payers.
[bctt tweet=”Everybody — even the largest customers — will eventually lose.”]
“At the end of the day, it’s understandable that large companies are dedicated to cash flow efficiency,” said APQC Senior Research Fellow of Financial Management Mary Driscoll in a statement. “But when that dedication devolves into callousness toward vulnerable suppliers, everybody — even the largest customers — will eventually lose.”
Additional statistics released by the report include:
The portion of small business owners still depending on personal credit cards and bank accounts to run their companies.
That means, according to researchers at Citizens Bank, that a quarter of small business owners are putting their business’ credit performance in jeopardy by using business funds for personal use — and vice versa.
According to the bank’s president of business banking, Quincy Miller, that can lead to a lot of problems further down the road.
[bctt tweet=”Using a personal account for business finances can quickly become a liability.”]
“Using a personal account for business finances is an easy mistake to make when starting out, but it can quickly become a liability. For instance, paying personal expenses using business money or vice versa makes it far more difficult to get your accounting right at tax time,” Miller said in a statement last week announcing the analysis.
“You also want to have a separate account for business so you can build a financial history that you can later use to apply for credit and other products or services you may need to run your business,” he added. “Finally, not having a separate account can make it too easy for companies to spend personal funds that may be needed for personal mortgage payments and other important household expenses.”
The volume of funds slated to get invested in blockchain startups and innovators over the next two years.
Reports last week from Magister Advisors released the forecast, a prediction drawn from surveying 100 financial institutions across the globe. According to the study, multiple major FIs are already investing in up to 20 blockchain projects to explore and develop use cases for the technology.
In a statement, Magister Partner and Research Lead Jeremy Millar highlighted how crucial the technology will be for banks and financial institutions in the coming years.
[bctt tweet=”Blockchain is the most significant advancement in enterprise IT in a decade.”]
“Blockchain is, without question, the most significant advancement in enterprise IT in a decade, on a par with Big Data and machine learning,” he said. “What Java is to the Internet, blockchain is to financial services.”
To recap: The future is looking bright for blockchain innovators. But small businesses will need to take a more proactive approach to their banking, and large corporate buyers will need to take a hard look at their payment cycles, if these companies want to be around for that future.
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