We all know savings that result from invoice automation alone are dismal when compared to the returns of early payment programs.
But what’s a little less known is that in order to achieve these high returns, you’ve got to speed up invoice processing, which could mean getting rid of paper invoices and automated routing processes.
Interestingly enough, organizations are eliminating these inefficiencies and recognizing the importance of working capital tools. Last year, only 8% of organizations were using a working capital solution. But a recent working capital report revealed that number shot up to 30% in 2015--that’s a 22% increase.
And even with a dynamic discounting solution, you still might be missing out on discounts depending on how efficient your processes actually are. What are some of the common causes of these inefficiencies?
Here are the top reasons for missed discounts in 2015:
Lengthy approval cycles (62%)
Manual routing of invoices (57%)
Missing information on invoices (55%)
Compare this to last year, when the top reasons for missed discounts were:
Decentralized invoice receipt (35%)
Large number of exceptions (26%)
Manual routing of invoices (15%)
It’s interesting to see the challenges evolve as discounting programs become more widely accepted and used. The invoicing process may be becoming more centralized, but not yet completely optimized to handle proper routing and exception handling, thus leading to lengthy approval cycles.
Embarking on a discounting program might seem daunting, but all these challenges are ones that need to be addressed at some point in order to promote a profitable and efficient supply chain. There’s never a better time to commit to automation and early payment discounting, the longer you wait, the more automation and financing savings you miss out on.
To learn more current market trends in working capital software usage among the world’s top organizations, download PayStream Advisors’ 2015 AP and Working Capital Report.