Coronacrisis causes defaults on invoices: research

Customers are more likely to default on invoices

invoices

Coronacrisis causes defaults on invoices: research. Source: pixabay.com

According to Onguard, 48% of finance professionals are dealing with outstanding invoices from customers due to the pandemic.

Besides, 65% of the respondents cited cash flow problems as the most common reason why customers are failing to pay on time. That’s an increase of 14% from February when just 51% of invoices went unpaid due to cash flow issues.

Over a third of finance professionals think their organization lacks the specialist software required for efficient working.

In fact, 55% of them are still relying on programs such as Excel and Numbers for their credit management on a daily basis.

The survey has found that only 35% use specialist credit management software to automate processes. The rest are relying on ERP systems or not having a dedicated system for debtor management.

This lack of technological support may explain why, despite mounting unpaid invoices, only 17% of finance professionals are calling debtors personally to ensure payment on time.

It is striking that not even a fifth of finance professionals seek contact with customers who pay outstanding invoices too late or not at all, especially since cash flow problems are the main cause of customers defaulting on invoices. However, while these issues are often best solved with personal contact, we understand this isn’t always possible due to lack of time. Therefore, an efficient and automated debtor process would be beneficial
Marieke Saeij, CEO, Onguard

We’ve reported that the European e-invoicing market is expected to reach $4,2 million by 2027, compared to $1,2 million a year ago.

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