Supplier invoicing placing heavy burden on UK businesses
A study by Wax Di...
New research has shown that the heavy burden of supplier invoice processing is leaving UK finance teams struggling with productivity.
A study by Wax Digital fund that 82% finance professionals surveyed said that poor invoice process management was impacting their teams’ ability to perform effectively and leading to low job satisfaction.
60% say that processing supplier invoices is the most hated aspect of the job amongst their team, 70% find it laborious and tedious, and it causes frustration for 69%.
Over half of the finance people surveyed regularly have to deal with suppliers issuing invoices with incorrect financial values and 37% said that the wrong or missing PO numbers and non-matching line items are also common problems.
For 34% missing VAT numbers were another frequent bugbear and 31% said that invoices often arrive addressed to the wrong legal entity within the business.
Finance teams are particularly concerned about the knock-on effects of manual supplier invoice management:
- Many worry about departmental output, with 45% citing impact on organisational efficiency
- 37% go on to say that these issues could hurt supplier relationships
- Just over one third also fear their team will make additional manual process errors
- A similar number show concern that their frustrated colleagues will leave their jobs
While there is a clear appreciation of the pitfalls and problems posed by invoice management, the answer is equally apparent, the report said.
Some 97% of those surveyed believe that automated invoice processing or eInvoicing would improve their team’s job fulfilment and 99% see opportunities to reallocate personnel who are manually processing invoices to more useful tasks.
46% would move people to work on process improvements and 45% would get people to find new solutions to managing errors.
Daniel Ball, director at Wax Digital says: “The fact that so many finance teams aren’t meeting their full potential should raise productivity alarm bells for UK organisations.
“As our survey shows, the ramifications of not having automated invoice management processes extend beyond organisational efficiency to team morale and personal performance.
“The big gains however come in actually being able to reduce the cost to process a purchase order requisition through to payment, which can be in the region of £25 to £40 per order. Multiply this by the vast number of orders an organisation makes and the benefits of invoice automation become clear.”
Will Public Procurement Budgets Increase in 2021?
Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less.
According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”.
Small, Local Suppliers Take Charge
Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals.
These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects.
Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity.
Post-Pandemic Funding Swells Procurement Budgets
And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns.
Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.