Current AR practices are impacting cash flow, human resources, and talent acquisition
Over 80% of UK businesses say the future of their company is threatened by late payments, according to BlueSnap.
The research has found that 93% of B2B organizations in the UK experience negative consequences due to their current approaches to AR, with 37% unable to forecast cash flow accurately.
On average, a quarter exceeds their payment terms, resulting in 29% of a company’s monthly revenue being tied up in AR. This is such a major issue that 81% of senior decision-makers believe that the future of their business is threatened by a lack of cash flow, brought on by overdue invoices.
A major culprit in all of this is the reliance on manual AR processes, with all of the senior decision-makers admitting that at least part of their organization’s practices are not automated. These included faxing (31%) and posting (39%) invoices and accepting payments in cash (11%) and physical cheque (9%).
The use of manual processes not only increases the risk of human error but also demands more time and resources spent managing invoices. On average, senior decision-makers estimate that a total of 11 working hours are spent managing a single invoice, with 78% estimating that up to 15 people are involved in this process.
Respondents recognized the need for change – 93% thought they should be investing more in AR automation and payment technologies, with predicted benefits including improved cash flow (34%), better forecasting and planning (31%), and reducing late invoices (25%).
However, they also saw the opportunity for increased growth – 28% believe it would give their organization the ability to invest and grow, while 24% linked AR automation to winning more business from existing customers.
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