Corporate cash management is imperative, but how are businesses today keeping track of their money? PYMNTS brings you the latest trends in the priorities of treasurers and the tools they deploy to get the books squared away. The latest data reveals emerging patterns in the cash flow management space, from where corporate treasurers position themselves within the enterprise to what the NetSuite acquisition could signal for the future of cloud-based business accounting.
The $9.3 billion price tag on the NetSuite takeover by Oracle could signal a new beginning of cloud-based ERP market consolidation after months of false starts. The takeover was revealed last week, but earlier rumors within the industry involved SAP, IBM, Microsoft and Salesforce all eyeing ways to strengthen their positions within the ERP Software-as-a-Service space, with frequent talk of M&A. Could this mean a wave of mergers is ahead? The market will have to wait and see, but the price tag on NetSuite and the pivot towards cloud-based enterprise solutions by big names in the industry certainly suggest corporations are heightening their demand for sophisticated, cloud-based financial management services.
47% of corporate treasurers in Asia-Pacific are self-described “business enablers,” hinting at the strategic role these money managers provide today. Asset Benchmark Research also found that just 35 percent said they consider themselves to be “value-added partners” to their businesses and only 17 percent consider themselves as “profit centers” for the company. That’s likely to change, though, with researchers predicting that, in only three years, 50 percent will begin to consider themselves a value-adding partner and 30 percent as profit centers. Analysts said this shift will be the result of corporate treasurers engaging with other parts of the enterprise (like procurement and sales) and taking stronger positions on risk and cash management. “It is very important that our treasury becomes a key contributor to the business in terms of working capital, cash management and financial risk management,” said one survey respondent from Hong Kong. “Those are very crucial to our operations, especially during this time because of market uncertainty.”
A 15.77% CAGR for the global procure-to-pay industry can be attributed to cash management demands, according to researchers at Technavio. Growth for the outsourced P2P industry between 2016 and 2020 will be fueled by needs among businesses to cut procurement costs, the report stated, along with other factors, like a heightened demand for automation and risk management. Outsourcing the procure-to-pay process, Technavio found, means businesses are freed up from spending resources on staff training, extra office space and equipment.
4 in 10 U.S. SMEs have a negative economic outlook for the year ahead, found Bank of the West — a figure, researchers said, that is unsurprising considering the negative press concerning the economy in recent months. Even so, small businesses surveyed by the bank report feeling pretty confident about their own futures over the next 12 months. In 2016, compared to 2015, small businesses are less likely to report that profits have declined, while 44 percent said their revenues had increased. The majority of small businesses plan to expand this year, whether by growing staff, investing or other means. The self-confidence in small businesses — considered the backbone of the U.S. economy — is unquestionably positive. But the data signals a disconnect between small business confidence and confidence in the economy.
18.8% of U.K. SMEs are familiar with mezzanine financing, an alternative form of financing that sees lenders acquiring assets in a company should the borrower fail to repay. The statistic, released by the British Chambers of Commerce and Bibby Financial Services, suggests that small businesses are lacking in awareness of alternative lending options. Less than half reported familiarity with other types of alternative lending, like angel finance or peer-to-peer funding. Despite earlier, separate analysis that concluded the number of alternative lending options for SMEs in the U.K. was “daunting,” this report implies that small businesses could be far more aware of their options other than traditional bank loans. Perhaps the appetite isn’t there, however. According to the Chambers and Bibby Financial Services, less than half of small businesses surveyed said they had applied for some kind of financing in the last year.
2 new banks joined SWIFT’s payments initiative, both becoming the first Indian FIs to do so last week. It was the latest show of support by financial institutions for SWIFT’s global payments effort to support same-day use of funds, fee transparency, international payment tracking and other features. India’s ICICI Bank and Axis Bank were the two FIs to get onboard for the initiative, which will first focus on B2B payments to aid corporates’ international growth. One can only assume that the banks in favor of the global payments effort are responding to their corporate clients’ needs for more efficient cross-border payments solutions. Earlier this year, SWIFT said 45 banks signed onto its plans.
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