AR and credit professionals have told us…
At a recent conference, an attendee asked me about the latest trends in the accounts receivable space and what impact invoice automation was having. His timing was perfect as we’d just released the results of our annual AR study that shows exactly what we should be excited about and where there’s room for improvement.
We run an annual survey with The Institute of Financial Operations that asks AR and credit professionals to share their opinions and practices around collections, invoicing and payment. This year, there are a few results in particular that tell me we’re about to see a greater shift towards greater adoption of e-Invoicing.
Ultimately, AR and credit professionals want to get paid faster or more predictably. As we know, there are a number of options available but not everyone has taken advantage of them.
Ninety percent of our survey’s respondents indicated that they were satisfied with the results of their collections efforts, but 50 percent said they were only ‘somewhat’ satisfied, which suggests to me that a significant number of organizations are open to finding ways to get their collections operating at the optimum level.
The opportunity to improve collections efforts is huge among our respondents as 86 percent told us that they still submit paper invoices through the regular mail. Some smaller organizations may be able to get away with accepting paper invoices, but the larger the firm, the greater the likelihood that they will reject paper due to the unnecessary inaccuracy rates and high cost of handling invoices manually.
While paper submission does prevail, the move towards e-Invoicing is gathering momentum as 29 percent of those surveyed use e-Invoicing, which compares to 20 percent in 2010. We see this swing continuing, especially as 85 percent of respondents said they believe that e-Invoicing expedites the collections process, which brings us back to my first point – companies want to be paid more quickly or more predictably.
Indeed, when it comes to getting paid sooner, more companies are being given access to early pay discounts. Our survey found that last year, 66% of respondents that were offered such discounts took advantage of them. We predict there’ll be a lot of activity in this area this year.
So while the e-Invoicing adoption figures are moving in the right direction, the survey reveals something more exciting just beneath the surface as so many organizations want to be paid faster and are not completely satisfied with their collections efforts. The door for invoice automation is wide open.