More Companies Expediting Collections Through E-invoicing and Early Pay Discounts
The third annual Accounts Receivable (A/R) Survey from OB10, the Electronic Invoicing (E-invoicing) Network, and the Institute of Financial Operations finds that more companies are accelerating their collections processes through e-invoicing and are taking discounts for early payment. The survey gauges the views of A/R and credit professionals in the areas of collections, invoicing, payment processes, and the economy.
The 147 participants included A/R and credit professionals, chief executive officers (CEOs), presidents and chief financial officers (CFOs) from small businesses to Fortune 500 companies in North America and the UK. The results indicate that e-invoicing continues to grow as a reliable invoice submission method, as 29% of respondents use it versus 26% last year. This is also the first year that respondents’ use of e-invoicing has surpassed that of electronic data interchange (EDI).
Regardless of the invoicing submission method used, 85% of respondents believe e-invoicing expedites the collections process. Additionally, early pay discounts are growing as a cash-management option, with two-thirds indicating that they have accepted discount terms offered by their customers.
When asked about the results of their collections efforts, 50% were only ‘somewhat satisfied,’ suggesting that there is an opportunity to find and implement an ideal solution – or combination of solutions – to improve collections. More respondents said that they were calling late-paying customers to chase payment. This method has increased in popularity over the last three years from 55% in 2010 to 61% in 2012.
“While this year’s survey shows good growth for invoice automation, more can be done to streamline the procure-to-pay process,” said Luke McKeever, chief executive officer (CEO) for OB10. “Increased adoption will improve organisations’ satisfaction in their collection efforts and eliminate the need to call customers to chase late payments. We can then expect to see more organizations take advantage of early pay discounts.”