Ad hoc payments are considered outside of recurring invoicing and check requests and can be processed in any payment method, directly to a bank account, in cash or via any form of instant payment system. Being the most common payment an average firm receives, by the business volume they account for, they are paramount in the cash flow management. Thus, many small and médium-sized businesses (SMBs) of all sizes turn to instant payment solutions to speed up access to funds, especially among larger firms. According to PYMNTS Intelligence data, 33% of mid-sized companies, those generating between $5 million and $25 million in annual revenue, receive ad hoc payments via instant methods. Nearly 6 in 10 of them are willing to pay a fee for that service and receive their payments instantly.
These are some of the findings explored in “How Instant Ad Hoc Payments Drive SMB Success,” a PYMNTS Intelligence and Ingo Payments research collaboration. The study examines SMBs’ reliance on ad hoc payments, their challenges when processing accounts receivable and how instant payment methods can help SMBs manage cash flows and set them up for success.
Typically, non-recurring ad hoc payments, whether for goods and service sold or any other form of income, represent the biggest portion of revenues generated by a firm. In the case of U.S. mid-sized companies, PYMNTS Intelligence research reveals that this type of payment represents 54% of total revenue, one of third of which are processed via instant payments. This means around $154K received instantly for an average mid-sized company every month, as per PYMNTS Intelligence estimates, a good indication of the crucial importance of this payment method in cash flow management.
Larger SMBs tend to receive a greater share of ad hoc payments via instant than smaller ones. As an indication, mid-sized companies, those generating between $5 million and $25 million in revenue receive 33% of their ad hoc payments via instant methods, while the smallest ones, those generating between $100,000 and $1 million in revenue only receive 25% of these payments instantly.