Posted: 01/06/21 by Invu Services Limited
- Almost a third of UK finance decision-makers say they are unable to process supplier invoices in less than 20 days -
New research has shown that UK SMEs are struggling to process their invoices in a timely manner, which has consequences for the entire supply chain.
Almost a third of UK finance decision-makers (29%) say that they are unable to process supplier invoices in less than 20 days, with an additional 6% saying it can sometimes take more than 30 days and another 7% unable to identify how long it took at all.
Covid-19 has exposed the false assumption that each business is independent, with many business leaders having the stark realisation that they are, in fact, highly reliant on the goodwill of their supply chain and the support of their community.
With six million SMEs in the UK at the beginning of 2020, any delays in processing invoices or poor payment practices can quickly put supplier relationships under strain and could leave many businesses battling for survival.
The results have been published as part of a wider independent research report, titled “The Covid-19 stress test for business: an accelerator for change”, commissioned by document management, accounts payable and purchasing solutions provider, Invu.
In addition to late payments, the research also exposed a lack of effectiveness of the Purchase Order Process in UK businesses during the pandemic:
● 15% revealed that the current purchasing process is broken and needs fixing as a matter of priority
● Over a third (35%) reported that their current purchasing process can be improved.
● Less than half of UK finance decision-makers (46%) reported that their current purchasing process works just fine.
Speaking of the results and the challenges businesses have faced, Ian Smith, GM and Finance Director at Invu, said: “Having weathered the pandemic, UK businesses need to be ready for a quickening of the pace as we emerge from lockdown. The need for real-time decision making based on reliable and timely data delivered from management reporting is critical for under-pressure business leaders who need to understand their liabilities and commitments.”
Smith continues, “It’s not all doom and gloom however, Covid-19 has brought out the best in some companies. For example, Morrisons used £60m of its cash reserves to pay its suppliers quicker to ease the financial pressure in their supply chain. Credit must be given where it’s due.”
Looking at how UK companies managed their supplier relationship over the past 12 months, the results from the research revealed that 29% of UK finance decision-makers tended to put their suppliers first and did not engage in competitive tendering for goods and services. Of these, 37% were prepared to take special measures (like Morrisons) to support their supply chain in these tough times.
Please visit www.invu.net to find out more.