Mid-sized Firms Outperform Larger Firms in Invoice Management
European companies with more than 5,000 employees take longer and spend more to process a single invoice than companies with between 250 and 499 staff, according to findings by information management firm Iron Mountain.
The study, undertaken on behalf of Iron Mountain by research company YouGov, interviewed 200 finance executives in the UK, France, Spain and Germany. The results suggest that many companies are struggling with out-dated processes and inadequate controls in invoice management. Figures provided by respondents indicate that while firms with between 250 and 500 employees take on average 8.60 days and spend £9.60 to process each inbound invoice, these figures increase to nearly 10 days and £12.80 for businesses with more than 5,000 staff.
These figures imply a lack of efficiency that is supported by other findings.
Almost a quarter (22%) of respondents from companies with more than 5,000 employees feel they have too many people tied up doing manual invoice processing, a concern expressed by just one in 10 (9%) of respondents from firms with between 250 and 500 employees. Similarly, a quarter (24%) of respondents from companies with more than 5,000 employees believe that the overall cost of finance is too high, compared to just over one in 10 (13%) of those from businesses with between 250 and 500 employees.
Respondents from the smaller firms were, however, more likely to express concern about their financial processing systems and document management processes being out of date: 13% compared to just 5% of respondents from businesses with more than 5,000 employees.
“Effective invoice management is a business critical process, regardless of company size,” said Bettina Wonsag, general manager of the business process management (BPM) division at Iron Mountain. “The larger the business, the more invoices it has to handle – and the more likely it is that these invoices will arrive in multiple formats, languages and currencies. As the volume and complexity of invoices grows, many finance systems reach their limits.
“Our study found that one in five – 19% – of respondents from the largest firms feel they lack control over their accounts payable process. Tackling this requires a company to invest heavily in new hardware and software and to train staff accordingly – using up valuable resources and expertise that could be redeployed elsewhere in the business. We enable companies to address this important issue, giving them greater control, compliance and cost savings.”