U.S. Businesses Plan to Reduce Use of Checks

To fill this gap and increase operational efficiencies, 40 percent of respondents plan to increase their use of commercial payment cards. The survey of several hundred financial and treasury executives from more than 20 industries provides an in-depth analysis of the effectiveness of todays corporate cash management processes. Responses indicate that a significant and growing perception among financial executives is that commercial payment cards play a very important role in almost every aspect of the cash management process. Some key activities companies hope will reduce costs and boost operating efficiency include the increased use of electronic payments through cards and the elimination of paper checks and invoices. While few corporate CFOs, treasurers and controllers find their current cash flow and cash management processes to be highly efficient, the survey findings indicated some improvement in achieving greater process efficiency. Nine percent of respondents in 2003 rated their cash flow management process as very efficient, increasing to 13 percent this year. Technology and Company Policy are Positive Impacts on Cash Management A growing number of financial executives view the introduction of new company policies and technological advancements as having the greatest impact on improving their ability to more effectively manage cash flow. Two thirds (66 percent) of respondents said changes in company policy have had at least a significant impact on the cash management process, and nearly as many (58 percent) cited changes in technology as having at least a significant impact. A solid majority (54 percent) said changes in corporate governance policies or other regulatory issues have had a significant to major impact on their companys ability to manage cash flow. Thirty percent said changes in technology have most positively impacted their ability to manage cash flow, followed by changes in company policies (27 percent). In addition, a majority of respondents said that changes in technology are expected to have one of the greatest impacts on cash management in the future, indicating technology investment may be a front-burner issue in the months ahead. Visa has anticipated these trends by enhancing card functions that make corporate policy compliance easier by increasing visibility into commercial payments through enhanced data reporting. Visa has also introduced new payment technologies like Visa Commerce, a new non-card based payment and information management solution, which interfaces seamlessly with e-procurement systems and handles high value payments of up to $10 million per transaction. Satisfaction with Commercial Cards Also on the Rise Corporate Americas overall satisfaction with commercial payment cards is also increasing. Of those respondents who indicated that they use card programs for collections and disbursements, 70 percent said they were somewhat or very satisfied, up from 55 percent in 2003. The survey found that commercial payment cards were used by 34 percent of respondents for an average of 22 percent of their total commercial payments. Most respondents recognized the cards value in each step in the cash management process, even more so than last year: -- 62 percent (up two percent from 2003) believed they were relevant or very relevant for cash disbursements -- 53 percent (up five percent from 2003) believed they were relevant or very relevant for short-term money management and the collection and application of receivables -- 48 percent (up five percent from 2003) believed they were relevant to very relevant for cash positioning and forecasting Importance of Payment Card Data Cited Using payment card data to further improve the cash management process is clearly an ongoing goal for businesses. An increasing nu