Survey Indicates Caution on Treasury’s 2013 Spending Plans

Capital One Bank recently offered a snapshot of treasurers’ plans for 2013, with the release of the results from an unofficial survey conducted at this year’s Association for Financial Professionals (AFP) Conference, held in Miami.

The polling was carried out on 15-16 October at the 2012 AFP Conference and responses were obtained from 102 finance professionals at the show, the majority of whom were US-based.

The eight ‘future gazing’ questions asked, and the responses received at the 2012 AFP Conference, were as follows:

  • Does your company have plans to implement new treasury management tools and/or services in 2013? – Yes 41%, No 59%.  
  • Does your company currently deposit its commercial cheques via smartphones? – Yes 9%, No 91%.  
  • If you do not use smartphones for cheque deposits, does your company plan to implement a mobile deposits platform in the next year? – Yes 15%, No 85%.  
  • Does your company currently use an integrated payables solution? – Yes 55%, No 45%.
  • If your company is not already using an integrated payables solution, does it plan to implement one in the next year? – Yes 41%, No 59%.  
  • Does your company use a commercial credit card to manage payables processing? – Yes 69%, No 31%.
  • If your company is not already using a commercial credit card to manage payables processing, does it plan to start doing so in the next year? – Yes 23%, No 77%.
  • Is your company using a virtual vault service? – Yes 17%, No 83%.

Commenting on the survey results, Nancy Pierce, vice president and manager of Capital One Bank’s treasury management, product management group, acknowledged that the unilateral 2012 AFP Conference survey was conducted when the outcome of the US presidential election was still uncertain, but she doubts that the results would have been much different had it taken place after President Obama’s re-election [for the official on-site survey please click here].

“There is still considerable uncertainty over Europe and the Eurozone,” commented Pierce, “and also how the US government intends to tackle the impending ‘fiscal cliff’ is a big issue. The parties have merely been holding talks up until now.”

However, Pierce detected significant pent-up demand among corporate treasurers and other financial professional for new automated systems and technologies, regardless of political worries. “There should be more action as the US economic recovery gradually picks up, and there are hopes that people will start spending again. In the meantime, the clients who we’re talking to are continuing to invest, so it’s not as though the whole world has stopped spending. There is still much that corporates can do to improve their cash flow.”

Conclusions

Pierce said that the relatively low take-up to date for using smartphones to deposit commercial cheques, as indicated by the survey, did not surprise her. “It’s still relatively early days, and it’s a technology that currently makes good sense only for certain businesses – although the number should grow as more businesses decide that it makes sense to them.” She also believed that although the survey indicated that just over three out of 10 companies do not yet use commercial credit cards for managing accounts payables (A/P) processing, there was likely to be steady growth over the coming years as more adopted cards for supply chain and vendor purchases – with the ability of cards for imposing additional controls and reducing the potential for fraud becoming more widely recognised.

On the topic of virtual vault services, which include cash logistics, cash processing, armoured transport and cheque imaging, Pierce said that these were best suited to cash-intensive businesses that carried out regular cash collections. “Often companies may not realise that processing cash is costly and automating the cash process is quicker and safer, with credit reaching the bank account much more quickly,” she added.

“There is still some way to go in getting a broader spectrum of businesses that make full use of automation. Capital One is continuing to refine its integrated payables offerings and hopes to be able to reach more corporates that are not yet using them.”

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