Editorial & Advertiser Disclosure Global Banking And Finance Review is an independent publisher which offers News, information, Analysis, Opinion, Press Releases, Reviews, Research reports covering various economies, industries, products, services and companies. The content available on globalbankingandfinance.com is sourced by a mixture of different methods which is not limited to content produced and supplied by various staff writers, journalists, freelancers, individuals, organizations, companies, PR agencies etc. The information available on this website is purely for educational and informational purposes only. We cannot guarantee the accuracy or applicability of any of the information provided at globalbankingandfinance.com with respect to your individual or personal circumstances. Please seek professional advice from a qualified professional before making any financial decisions. Globalbankingandfinance.com also links to various third party websites and we cannot guarantee the accuracy or applicability of the information provided by third party websites.
Links from various articles on our site to third party websites are a mixture of non-sponsored links and sponsored links. Only a very small fraction of the links which point to external websites are affiliate links. Some of the links which you may click on our website may link to various products and services from our partners who may compensate us if you buy a service or product or fill a form or install an app. This will not incur additional cost to you. For avoidance of any doubts and to make it easier, you may consider any links to external websites as sponsored links. Please note that some of the services or products which we talk about carry a high level of risk and may not be suitable for everyone. These may be complex services or products and we request the readers to consider this purely from an educational standpoint. The information provided on this website is general in nature. Global Banking & Finance Review expressly disclaims any liability without any limitation which may arise directly or indirectly from the use of such information.

UK LAGGING BEHIND ON PAYMENT INNOVATION

Author: Andrew Jesse, VP, Basware UK

A survey we conducted over the summer threw up some interesting regional figures around payments processes, andat the same time helped reinforce someclassic national stereotypes. When it comes to paying suppliers,it seems UK businesses exhibit an almost Victorian sense ofhonour and duty. Over 94 percent of UK respondents said they believed they had a social responsibility to pay suppliers promptly, compared to an international average of 88 per cent.

Andrew Jesse, VP Basware UK
Andrew Jesse, VP Basware UK

Unfortunately, for much of the UK, the processes in place to make these payments also hark back to a different era. Almost one in fourrespondents (23 per cent) across the whole sample said they had highly automated processes in place. However, this fell to just 16 percent for the UK, the lowest of all the regions surveyed, and well behind Scandinavian leaders such as Sweden (29 per cent), Denmark (27 per cent) and Norway (26 per cent).

The survey took placein June and July 2014, and involvedover a thousand strategic decision makers working within finance, all of whom had a view of accounts processes. Theywere split almost equally between SMEsand enterprises, giving a healthy mix of different perspectives. In addition to the countries mentioned above, the survey also covered Australia, Belgium, Finland, Germany, the Netherlands and the US.

As well as the UK’s sense of duty, and the clinical efficiency of the Nordics, the results also revealed some other interesting views around payments. Nine out of ten organisations said they saw late payments as having wider issues, limiting the flow of funds between various parts of the economy. As we have seen all too recently, restricted liquidity is one of the quickest ways to strangle the life out of an economy, and payments innovation is essential for keeping the global wheels of commerce in motion.

For change to be implemented, government action is required. As with many things financial, the easiest way to implement them on a wide scale is from the top down, with a government mandate. We have seen that Nordic countries are European leaders in payments innovation, and they have been engaged in electronic procurement for some time. They also contain a significant proportion of Europe’s Billion Euro businesses and, in the case of Finland and Denmark, their position has been further enhanced by mandates that stipulate all public sector bodies must receive invoices in electronic format.

In Denmark, change and adoption was instigated by legislation – the argument being that the public sector and all companies had to be committed to e-invoicing in order to ensure critical mass. From February 2005, paper invoices were no longer accepted by public sector buyers, and payments were withheld until the invoice was received in the correct format.

Within a year and a half, nearly 98 per cent of invoices were received electronically. Denmark has saved approximately €135 million a year from its transition to e-invoicing. If this was scaled up in line with the UK economy, it would equate to a saving of around €1.5 billion.

Figures do suggest that the UK is moving in the right direction, with 53 per cent of organisations saying there had been more focus on e-invoicing in the past year. This was the highest figure of all the countries surveyed, and stacked up well against an international average of just 43 per cent. From a position of relative weakness, the UK is now showing progress, but a mandate for e-invoicing from the government would really kick start the payments revolution.