Connecting Purchase-to-Pay is Critical The Real Implications of Late Payments

By Susan Avery, , Contributed by OfficeMax CU Quarterly , June 2012 Chief Financial Officers are concerned that the inte


Recent Posts

Older Posts

Susan Avery,, Contributed by OfficeMax
CU Quarterly, June 2012

Chief Financial Officers are concerned that the interdependency between suppliers, partners and customers resulting from increasingly complex supply networks is creating commercial risks for procurement operations. This is according to a report by Basware, provider of e-invoicing and purchase-to-pay solutions.

The second phase of The Cost of Control – Disrupted Networks report is part of a third annual study commissioned by the company. It provides insight into opinions and priorities of more than 500 CFOs and other finance executives around the world and helps demonstrate the impact that the increasing complexity of commercial interactions is having on buyers and suppliers and the implications of late or erroneous payments. According to the report:

  • Finance executives believe 15 percent of invoices remain unpaid past their payment terms, even though two-thirds understand late payments cause problems for their suppliers. Thirty-eight percent acknowledge that their late or erroneous payments to suppliers impact the suppliers’ commercial performance to the same degree as it would their own business.
  • Fifty-nine percent of CFOs think the visibility of supply chain activity and supplier payment is becoming more difficult due to the increasing complexity of the networks. Sixty-four percent believe that the transparency of an open and collaborative supplier network helps to overcome some of these challenges and provides a more effective basis for sustainable cost savings than closed or exclusive network environments.
  • When asked about the most significant challenges of making improvements to purchase-to-pay systems, 46 percent of CFOs state the lack of flexibility of the systems and the disruption to complex supplier networks caused by changes to these systems. However, 62 percent claim that connecting disparate parts of the purchase and payment process within their businesses will be critically important in the next 12–24 months.
  • Taking a deeper look at how organizations can improve collaborative interaction, 56 percent of finance executives consider shared information and e-commerce systems to be the most effective methods for enhancing businesses collaboration across disparate supply chains and improving the way companies interact on a commercial level.

About My Purchasing Center™ and Susan Avery
My Purchasing Center™ is a website designed to provide the essential information required by purchasing and procurement management professionals to keep their companies competitive in a dynamic global marketplace. My Purchasing Center™ reports news, pinpoints trends, interprets events and presents proprietary pricing and supply data through unique content developed through its editorial staff, strategic content partnerships and by creating an online hub for information.

As chief editor for My Purchasing Center, Susan is responsible for creating content--writing news and feature stories and blogging--on issues important to purchasing professionals as well as managing and editing content contributed to the site. She has over 25 years experience covering the purchasing industry.

 Post Tags: general office