Thursday 4th September, 2014

Over half (57%) of international businesses surveyed by Basware and MasterCard admit to having actively delayed paying their suppliers in the past 12 months. The findings underscore a late payment culture, which three out of four businesses now consider normal practice, that is hampering in particular small and medium-sized enterprises (SMEs).

Basware and MasterCard have introduced Basware Pay, a solution that connects buyer and supplier payment processes and enables working capital optimisation, to help break this cycle. It allows buyers to better manage their cash flow and allows suppliers to get paid sooner.

"When three quarters of businesses have more than 50 suppliers and about two thirds send and receive more than 100 invoices a month, a culture of late payments impacts individual organisations as well as the economy as a whole." said Esa Tihilä, Chief Executive Officer, Basware.

Over 1,000 strategic decision makers across Australia, Europe and the US participated in the “Creating Payment Energy” research. The results highlight the tension between cash management and efficient payment processes. Here are some of the top findings:

• While the vast majority (88 per cent) of respondents agree that suppliers should be paid promptly, over half (57 per cent) admitted to having actively delayed payments in the past 12 months
• Three quarters (74 per cent) of decision makers think late payment is a fact of business life and will always happen, despite 90 per cent acknowledging that payment delays have wider repercussions for businesses, such as the ability to pay staff or reduce investment
• Two thirds (67 per cent) acknowledged that they have used payment terms as a strategic lever to help manage cash flow
• Only one in four businesses has highly automated processes to manage payment efficiently.