Ola Polczynski 15 June - 3 min read
Chasing late invoice payments is a burden for any business, and still, more than half of B2B payments in Australia continue to be processed late, costing businesses, on average, $115 billion every year.
The process of dealing with late payments shouldn’t be inefficient and stressful, but without adequate systems and processes in place it can get out of hand quickly. While businesses might understand the benefits of implementing digital payment solutions, many continue with manual legacy systems because these work well enough. But relying on slow and often manual payment processing and account reconciliation methods imposes a range of risks, including:
Issue 2: Having enough time to properly manage the collections processNot only does it come at a huge cost, but chasing late payments is also an unproductive drain on resources for any business. Today, companies are spending about 520 hours per year on accounting and administrative tasks, including manually processing invoices and payment reconciliation, equating to over three months worth of time for one person.
Issue 3: Poor data managementMany businesses continue to operate across multiple systems that require manual efforts to connect data – which of course, is prone to errors. This opens businesses up to a lot of risk, including lost or misplaced customer data, security breaches and violations of privacy laws. And not only that, but poor data leads to poor decision making which can negatively impact long-term productivity and growth.
When you’re running a large operation with hundreds of invoices processed each month, the resources required to manage your payments grow quickly, especially when ageing receivables become a problem. While customers may not pay their invoices for various reasons, it happens too often, causing a range of challenges and increased risk.
Digital payments helped businesses get paid safely and efficiently throughout the COVID-19 lockdowns and associated restrictions. But as economies reopen many challenges still face businesses including supply chain disruptions, the ‘great resignation’, rising inputs such as fuel, and the expense of reopening. These business challenges make now an opportune time to build on the processes optimised throughout the pandemic, especially across B2B trade.
In an increasingly cashless society, how can sellers easily and cost-effectively receive payment? One answer is using Pay Invoice By Link technology.
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