How Small Firms Can Avoid A Cash Flow Crisis?

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...simply not happening because it takes too long to get paper invoices approved and processed.

Short payment targets are clearly meaningless if the fundamental building blocks are not in place to transform the way suppliers are paid. Unless invoices can be rapidly approved and processed, there is no opportunity to reduce payment times.

Yet while today a large proportion of both orders and payments are made electronically, some 90% of invoices are still submitted on paper. Unless organisations make the transition to electronic invoice provision it will be impossible to transform payment timescales and, hence, improve SME...

...cash flow.

In Europe, many governments have taken the decision to implement e-Invoicing across the public sector in order to support a faster payment and more cost effective model. These government mandated initiatives typically require any organisation doing business with the public sector to submit invoices electronically as a means of improving processing efficiencies.

With e-Invoicing and invoicing best practice, SMEs can get the invoice in to the buyer quickly, accurately and in the right format. In addition to enabling SMEs to cut costs, improve credit control and get paid quicker, e-Invoicing offers significant benefits to buyer organisations. Automatic integration of invoice data directly into back office systems enables approval, payment and reconciliation processes to be streamlined.

Furthermore, e-Invoicing provides the platform for far more effective and innovative financing models — ranging from the adoption of corporate Direct Debits (such as the new SEPA B2B Scheme) to the use of supply chain financing to improve SME cash flow.

This latter model is compelling for both banks and businesses alike. Given the increasingly tightly integrated physical supply chains, there is clearly an opportunity to leverage the strong credit of the buying organisations — retailers and the public sector for example — to improve the... continued on page three >

 

 

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