DOING MORE WITH LESS Key challenges faced by finance departments in UK
As the domestic economy stagnates and the Eurozone remains unstable, companies in the UK are continuing to focus on consolidating their operations and finding ways to do more with fewer resources. For many, this has led to the overhaul of existing procedures and corporate structure to adapt to the challenging environment, as evidenced by one of the UK’s growth industries: e-invoicing.
Basware and Accounts Payable News have carried out a survey of finance professionals working in UK organisations of all sizes, from large corporates to SMEs, in industries as diverse as airlines, pharmaceuticals, retail, FMCG and manufacturing. Our aim was to find out what is really going on in Purchase to Pay (P2P), including the challenges being faced and the day-to-day impact of trends towards automation and collaboration.
Cost reduction In light of the need to achieve more with fewer resources, we were not surprised to find that nearly 60% of respondents identified cost reduction as the major challenge they face in 2013. To achieve this broad aim, they are faced with a number of operational challenges that need to be overcome, for instance improving the tracking and timely payment of invoices and maintaining a master supplier file. To this end, there is an increased awareness of the need to streamline P2P processes. The overall picture continues to be one of maximising process efficiencies and cutting costs to a minimum in order to maximise front line profits.
Maintenance of standards
As a result of cost reduction initiatives and reduced staff numbers, which are an unfortunate but necessary symptom of economic downturn, the maintenance of standards has become a challenge for organisations. This problem was identified as such by 55% of respondents. Yet, despite this awareness, very few respondents were actually monitoring key metrics within their organisation, with less than 15% looking at DPO rates and less than 40% looking at exceptions and auto match rates. This begs the question: how can you maintain high standards when you have no accurate idea of how your department is performing?
A lack of control over financial standards can have real and negative implications for a business. For instance, the majority of the organisations we surveyed were only able to capture early settlement discounts on 5% of their invoices, thanks to delays that lead to late payment. Improving this statistic could lead to substantial monetary and reputational gains.
Choosing the right technology
Our survey respondents indicated that the process involved in choosing and implementing new technologies continuously challenges them. This, in turn, creates a challenge for solutions providers to develop technologies that are easy to use and implement and which, most importantly, can clearly demonstrate ROI.
We’ve seen a really positive trend this year with automation levels rising right across the finance department. The number of those making use of e – invoicing have risen 6% year-on-year to 43%. However, there remain a number of barriers to gaining more widespread adoption, with 43% of respondents highlighting a lack of available resources, in particular time, and 41% stating that supplier adoption was causing them to re-think or delay their plans. What is promising, though, is that the respondents tended to demonstrate a desire to move towards e-invoicing, even if they lacked the means.
The overall message that threads through these challenges is ‘do more with less’.
The emphasis for UK finance departments, as demonstrated by our participants’ responses, remains tightly focused on making cost savings and ensuring that best practice processes are in place to help achieve this.
We are seeing a culture shift whereby increased collaboration between the finance department and other internal stakeholders is leading to a blurring of boundaries and a rise in awareness of the real operational value brought by the finance department.
Find out more
To learn more about the need for financial collaboration come along to our seminar at The Ritz in London on 26th September, 2013. You will get a chance to hear inspirational speakers from SITA UK and Oxford University Press on their best practices.
By attending the seminar you will hear first-hand how organisations like yours have simplified their financial processes to enable more agile, less costly invoicing and purchasing, more accurate forecasting, a deepening of supplier and customer relationships and improved overall financial performance.
See you there!
About Andrew Jesse:
Andrew Jesse is responsible for enterprise sales in the UK and Ireland and has been with Basware for eight years, initially as vice president, professional services for North America. He joined Basware after spending six years in supply chain and systems consulting and has a wealth of expertise in purchase-to-pay (P2P)
Basware provides open, secure, cloud-based purchase-to-pay and e-invoicing solutions to organisations of all sizes, resulting in greater efficiencies in procurement, accounts payable and accounts receivable.
Companies across all industries, from small businesses to corporate giants, use Basware solutions to drive sustainable cost savings, proactive insight to cash flows and improved buyer–supplier relationships. The Basware Commerce Network is founded on the principles of openness, where all types of organisations can collaborate and trade, making it the largest in the world. Today we connect millions of business users in 900,000 companies across over 100 countries.
Basware is the global leader in providing solutions for better buying, better selling and connected commerce. Find out how Basware boosts financial performance and profitability at www.basware.co.uk
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