More new research released today has again highlighted the ongoing problems being caused by COVID-19, particularly when it comes to businesses getting paid.
Commissioned by payments provider GoCardless, the findings show that 70% of B2B businesses in the US surveyed said that 5% or more of their payments have failed in the last 12 months.
Adding to the financial pain being felt by companies, around 20% of the failed payments ended up being listed as bad debts for over a third of the B2B businesses questioned. The data also shows that as a result of payment issues some 70% of the businesses surveyed have tried to move towards automated bank debt payments, as opposed to processing old-style paper checks.
Since the arrival of coronavirus, B2B decision-makers have ramped up their willingness to embrace bank debits. The automated, pull-based bank-to-bank transfer, known as ACH debit in the US system is infinitely more practical than check payment methods, although paper payments still stand at a sizeable 64% of transactions.
While the study reveals the difficulties being faced by businesses, both in the US and farther afield, it also underlines areas of positivity. Alongside a concerted effort by companies to move towards accepting digital payments, the area of recurring payment solutions is growing, as business owners look for more efficient ways of retaining customers and ensuring a more stable flow of cash.
With subscriptions being more popular than ever thanks to cloud, mobile and other technological advances, businesses are increasingly leaning towards recurring payment methods to keep customers on their books.
The report shows that 36% of US business leaders expect recurring payment solutions to let them expand into new territories. The report concludes that the move will not only boost payment strategies, but will also shorten DSO (Days Sales Outstanding) issues, as well as helping to strengthen turnover.