Financial leaders are delaying payments to suppliers for longer than at any point in the last decade. A new research study estimates that 1,000 of the largest U.S. public companies have a collective $1.1 trillion in supplier payments-payments that have not been received from their own customers and inventories. Some 50% of invoices are past their due date this year, compared to 48.8% in 2017.
The largest public enterprises took an average of 56.7 days to pay suppliers last year, the longest timeframe in the last decade, increased from 53.3 days in 2016. With the economy gaining steam, manufacturers, distributors, and retailers can no longer be confident that suppliers will continue to put up with late payments.
Some claim that supplier payment delays are an intentional effort to keep more cash on hand and push the cash flow burden onto the suppliers. However, a lack of invoice automation-which makes the Accounts Payable wheels grind to a halt in many organizations-is a key reason for late payments.
Some challenges that organizations face in the AP industry include, lack of real-time availability of data, inability to process high volumes at current staff levels, and difficulty locating/managing paper-based documents.
AP is often overlooked as a critical focus of digital transformation. ERP solutions and/or accounting systems, provide fast return on investment. The system can streamline the day-to-day mission-critical tasks to transform AP operations by extracting data from printed/typed documents, eliminating duplicate data entry and making it easy to retrieve data, review invoices, and push them along the AP workflow-automatically. Process efficiencies speed turnaround and ease the pressure on staffing levels, enabling AP departments to handle greater volume and save money.
Automating AP enables organizations to pursue strategic initiatives, more precise cash management, improved supplier relations, and better business/data intelligence-and capture early pay discounts, which can contribute substantially to a business’s bottom line.
Effective leadership and understanding go a long way to keep your staff engaged through new routines. The COVID-19 coronavirus pandemic is sending its shockwaves all over the world. Officially categorized by the WHO to be a major pandemic, the infection is accelerating through multiple cities and countries, and no one knows how it will play
An adaptable platform is needed to adjust to the versatility and volatility of today’s global marketplace. Companies grow through the adaptability of their technology and the implementation of versatile business solutions along the way. It’s these solutions that allow for swift decisions, backed by data, that give you more control to push forward or pull