Nine of 10 Companies Face Problems with Payment Operations, 39% Still Manual, New Modern Treasury Research Reveals

Modern Treasury, the operating system for the new era of payments, today released survey results from their annual The State of Payment Operations 2023 report showing that legacy payment operations continue to result in high rates of failed payments, slow payments, errors and lost time in finance departments to clean up issues.

Nine in 10 decision makers (90%) say their company faces problems with payment operations, with the biggest being payment reconciliation taking too long (32%), lack of real-time insight into cash balances (31%), high rate of payment failures (27%), data errors (26%), and a low rate of accurate payment reconciliation (23%).

The Harris Poll survey conducted for Modern Treasury for the third straight year included 500 companies with 500-4999 employees. It also found that:

• 40% of B2B payments fail, which cost time and money to correct.
• 70% of financial decision makers say managing payments takes too long, with 39% saying half of their operations are still manual.
• 64% say their finance team wastes a lot of time on payment operations. On average, teams lose 9 hours a week?time that could be better spent on strategic matters.

The good news? Most financial decision makers (93%) say they are likely to invest in payment operations within the next 12-18 months, with half speeding up those plans to counter the current economic climate. What do they want most? Shorter payment processing times (55%), the ability to manage all bank accounts in one platform/system (53%), and automatic reconciliation (51%).

"Many companies are behind the curve with payment operations even as expectations rise for faster, more seamless payments," said Dimitri Dadiomov, Modern Treasury CEO and co-founder. "Companies clearly see the gains to upgrading and automating payment operations and it's just a matter of when and how they do it. That will not only benefit individual companies and their operations, but speed up the entire economy as money movement becomes more efficient."

Faster payment rails are already changing the dynamics of accounting for money. Six in 10 financial decision makers (60%) use instant payment rails, with another 28% planning to use one in the next 12 months, the survey shows. The FedNow instant payment rail, launched in July, will increase adoption of instant payments. When money moves instantly, 24/7/365, companies will need real-time automatic reconciliation to keep up.

Having a complete financial view of money movement across multiple bank accounts is also key, and especially important in the event of a bank failure or reactive market. Yet 67% of survey respondents say it is hard to get that.

While problems exist, nearly all financial decision makers believe that automated, faster payment operations would benefit their company in terms of better customer experience (48%), which was cited by more companies this year than in the previous two years, long-term cost savings (44%), greater visibility into money movement (44%), more time to build products (40%), and fewer money movement errors (40%).

"Despite barriers, companies want and need a change that can help them increase payment speeds, improve reconciliation, and invest more in strategic areas to propel growth," said Rachel Pike, Modern Treasury Chief Operating Officer. "Payment operations are the central nervous system of every company. This survey reveals the need for modernized solutions for such critical infrastructure. Modern Treasury's operating system automates the entire cycle of money movement from payment initiation to reconciliation. Our goal is to help companies unlock new payments revenue, strengthen customer experiences, and drive efficiency through their business."

To access the full The State of Payments Operations 2023 report, please click here.

About Modern Treasury

Modern Treasury is the operating system for the new era of payments, helping companies unlock growth, enhance customer experiences, and drive efficiency. The payment operations platform and best-in-class developer tools move companies forward with faster payments, effective workflows, full data visibility, and seamless bank integrations. Founded in 2018, San Francisco-based Modern Treasury serves leading companies across broad sectors of the economy like ClassPass, Gusto, Marqeta, Procore, Navan, and more and is backed by investors Altimeter Capital, Benchmark, and Y Combinator.