B2B Payments

Billions Of Dollars Wasted, But Soaring SME Optimism

It’s no April Fools’ joke: 2016’s first quarter has already wrapped and, with its closure, comes a wave of data looking back at the state of corporate finances. We examine the findings from several market reports on small business access to capital, lending, growth and employment. Plus, a look at the three areas each leading to more than $2 billion in extra costs for businesses every year.

 

$2.8 billion worth of exaggerated expense reports slam businesses every year, found Chrome River. The expense management company says that employees that fudge the numbers on their expense reports to get reimbursed are hitting their employers hard. Despite the scary figure, Chrome River added that the majority of employees don’t fib on their expense reports — 94 percent said they are honest when seeking reimbursement for company travel. 

$2.45 billion in loans were taken out by small U.K. food suppliers last year as a direct result of late payments by supermarkets, as well as plans to invest in new equipment, found new analysis from LDF. That figure represents a 30 percent increase in borrowing among these SMEs compared to 2010 and a 70 percent increase compared to 2006 figures. Researchers pointed to pressure on supermarkets to reduce prices amid a highly competitive market, which, in turn, has these sellers imposing extended payment terms on their food suppliers. LDF said the latest federal efforts to combat late payments by the U.K. have not yet given any relief to smaller businesses in the food sector.

$2 billion in excess interest payments hit corporates with bonds, a new report from Fideres found. The analysis, released last week, examined more than 700 bond issuances between 2010 and 2015 and found that interest costs could have amounted to up to $18 billion in excess fees for corporations across the five-year period. Fideres noted that banks are likely to blame, as they struggle to please both the businesses that issue the bonds and the investors that buy them.

150,000 new users will land in Basware’s eProcurement network thanks to the acquisition of fellow cloud-based procure-to-pay firm Verian, based in the U.S. The takeover, announced last week, will aid Basware’s expansion across the U.S.; the price tag for buying its competitor was $36 million, the firms said.

68% of B2B buyers made their purchases online in 2014, found Accenture Interactive in a newly released research report. That’s up from 57 percent in 2013. The analysis clears any doubt that procurement is going digital. Researchers also found that the number of B2B buyers that spent at least 90 percent of their budgets online has doubled between 2013 and 2014, from 9 percent to 18 percent. However, less than half of these buyers are procuring directly from a supplier website; the rest, researchers said, are using third-party eProcurement marketplaces or other means.

62% of small firms are planning raises for their employees this year, an optimistic figure found by Dun & Bradstreet in its latest Private Capital Access Index. The report found that businesses’ confidence about their future is at a five-year high, with 86 percent of SMEs surveyed reporting feeling either “optimistic” or “somewhat more optimistic” about future company growth. However, the report also found an increase in the number of businesses taking caution when proceeding in the economic climate, with an increase in the number of those surveyed citing that the current economy is restricting future growth opportunities.

44% of SMEs sought funding last year, most often from a bank, found Bibby Financial Services in its latest survey. Researchers concluded that, even with the rising popularity of online lending marketplaces, traditional lending sources remain the top destination for small and medium-sized businesses. Asset-based lending was the second most common form of financing sought by these companies. Nearly half of the businesses surveyed said cash flow management was their top reason for seeking financing, followed by the need for new equipment. The majority of those surveyed said they only seek financing once a year, if that.

41% of SMEs plan to launch a new product in the next five years, according to data from SunTrust. The bank published its Business Pulse Survey last week, concluding that small and mid-sized businesses are optimistic about their upcoming growth compared to the year prior. About one-third of small businesses plan to grow at home, while 28 percent of mid-market firms are looking overseas to expand. Further, more than 80 percent of all SMEs said they consider their businesses to be strong.

27.4% of businesses increased their payroll between February and March, found the CBIZ Small Business Employment Index. That good news is negated by the more than 20 percent that decreased their staff numbers and the more than half of SMEs that didn’t make any changes to their workforces. CBIZ Employee Services Organization President Philip Noftsinger said in a statement that the findings were “mild.”

A 19% CAGR will boost the cloud T&E market, according to the latest forecast from Global Market Firm. The Software-as-a-Service travel and expense management sector is slated to see this impressive growth through the decade, driven by the need among corporations to reduce expenses and seek out an end-to-end expense management solution — one that not only provides spend tracking but also deploys analytics capabilities. The biggest threat to cloud-based expense management’s growth? Security, as companies depend more on Big Data.

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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