Australian SMEs lose time to payment inefficiencies, survey finds

Research by Adyen has identified that Australian small and medium-sized enterprises are struggling with slow cash flow and inefficient payment reconciliation, resulting in operational challenges and a significant loss of time.

According to the Adyen SME Platform Payments Survey conducted with YouGov, four in five SME decision-makers said that slow cash flow adversely affected their business operations, with the problem being especially acute for businesses with annual turnovers exceeding $10 million.

The findings come amidst recent data from CreditorWatch showing a 47% increase in invoice payment defaults over the past year, a development that signals heightened stress across the business community. The hospitality sector has been highlighted as particularly impacted, experiencing record-high rates of business closures and indicating the financial pressure faced by many SMEs.

Payment inefficiencies are compounding these challenges for SMEs. The research found that 73% of SME decision-makers consider payment reconciliation a significant frustration. Businesses are reported to be losing an average of six hours per week on accounting and reconciliation tasks, time that could otherwise be allocated to business growth initiatives.

RMS, a Software-as-a-Service provider in the hospitality sector, has noted these operational burdens. "Hospitality operators tell us that payment inefficiencies can be a major operational burden, impacting guest experiences and staff productivity," said Adam Seskis, Chief Executive Officer of RMS. He added, "Many struggle with manual reconciliation processes, and a lack of integration between payment systems and other business tools. These challenges not only slow down daily operations but also create friction at critical customer touchpoints, from check-in to check-out."

The research shows that although Software-as-a-Service (SaaS) platforms are gaining traction among SMEs seeking solutions to cash flow issues, significant inefficiencies remain. Seventy per cent of businesses using SaaS platforms reported that their main SaaS provider offered consolidated reporting. However, 57% still rely on multiple SaaS tools for payment reconciliation, leading to greater complexity rather than streamlined processes.

The survey identified a demand for improved integration within SaaS solutions. Nearly a third (31%) of SME decision-makers see consolidated reporting as their top SaaS priority, and 28% say they would consider switching platforms if a competitor provided better consolidated reporting. Additionally, 20% highlighted enhanced risk management as a significant factor in evaluating new SaaS platforms.

Adam Seskis noted that solutions such as embedded payment systems can yield substantial benefits for businesses. "By embedding automated, frictionless payment solutions into our platform via RMS Pay, we've helped businesses reduce an average of 10 hours a week in admin time, which ultimately allows them to focus on delivering great service. Beyond reconciliation, we're also enabling SMEs to significantly reduce disputes by 93%, translating to an average of $50,000 to $200,000 per property," he said.

Hayley Fisher, Country Manager for Australia and New Zealand at Adyen, commented on the findings and the role SaaS providers can play in addressing these pain points. "SaaS providers have an incredible opportunity to go beyond offering basic software solutions and become true enablers of SME success. By embedding payment technology that streamlines reconciliation and accelerates cash flow, SaaS platforms can help SMEs spend less time on admin and more time on growing their businesses. Those that step up with smart, seamless financial tools will become indispensable to their customers."

Research from Adyen and other sources suggests that by integrating effective payment capabilities, SaaS platforms could offer SMEs much more than administrative software, providing the financial infrastructure required for sustainable business growth.

The Adyen SME Platform Payments Survey gathered responses from 435 Australian SME decision-makers using or intending to use SaaS platforms. It highlights the ongoing challenges SMEs face with cash flow, administrative efficiency, and the need for scalable software solutions that integrate payment and reporting functions.