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Invu Services Limited

A Very British problem: Stagnant Productivity say majority of finance managers

Posted: 15/07/20 by Invu Services Limited

The British problem with productivity continues in accounts payable and purchasing processes according to recent research. The report found that we are not helping ourselves with systems becoming less user-friendly and processes still being manual and paper-based.

More than half (55%) described inefficient processes as a problem in their business, up from 54% in 2018 and 36% in 2016, while the number saying basic processes are “easy to use” dropped to 57%, from 68% in 2018.

These are some of the findings in a new independent report commissioned by automated accounts payable and document management software specialist Invu.

The report, “Perception vs reality – the real state of Accounts Payable and Purchase Order Processing in UK business”, highlighted several ongoing and worsening problems within business finance functions, resulting in concerns about fraud and persistent late payments.

For instance, nearly a third (32%) said that their company still received invoices in paper form to be processed manually.

The most popular way to receive invoices was as an email attachment (42%). In the era of moving from paper to digital, it is surprising to find that 72% followed company policy to print the invoice out to process manually. 28% of these document audit trails on the paper copy of the invoice.

Document management was another area rife with inefficiencies according to the 200 finance decision-makers in Invu’s survey. More than a quarter (28%) said they had poor visibility over workflows and a lack of audit trail because of this reliance on manual filing systems.

The historic trend of stagnant productivity is worrying enough. The future does not look much brighter with only 32% identifying that their company had plans to invest in new systems or processes to improve the situation.

Ian Smith, general manager and finance director at Invu, said “Given this problem has been identified by so many finance decision-makers, you would expect that there would be a more aggressive approach to solving this productivity problem. This is particularly true given the availability of well-established technological solutions like automated accounts payable and purchasing solutions.

“UK legal requirements specify that supplier invoices are held for at least seven years. When held in a paper form they consume large amounts of space with attendant risks of loss of data. The paper either deteriorates or risks being damaged by floods or other natural hazards. Is ‘a mouse made a nest using my audit trail’ an acceptable excuse for HMRC?

“One of the biggest frustrations I find from staff reliant on paper records is the time wasted staff trying to track them down. Only to find, when they do retrieve them, they have more work to do to understand the audit trail. Who approved the purchase and why?”

Separate research by The Access Group revealed that nearly half (48%) of UK employees waste at least three hours a day working through inefficient processes, at a cost of about £28,000 a year – the cost of a full-time employee.

The lack of efficiency around robust processes also caused 51% of respondents to doubt the reliability of any information they gather internally from company systems.

Similarly, a global study carried out by OnePoll found that roughly a quarter of an employee’s day is wasted on avoidable administrative tasks.

Smith added: “Any business operating at scale while relying on manual, complex processes is going to be at a significant competitive disadvantage. Time spent trying to solve a quiz about why something occurred is not available for customers. Getting control and visibility over workflows and, subsequently, the audit trail is essential to manage time and reduce the cost of back-office functions.”

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