7 facts about invoices and corporate accounts receivable
400 billion invoices are produced each year, whether in paper or electronic format. That makes these transactional documents one of the best vehicles for a company’s brand, but also for providing a good customer experience. Nonetheless, 90% of invoices around the world are still handled manually, making them prone to error and at risk of getting lost.
Given the cost of creating, printing and sending paper invoices, it is clear that accounts receivable departments take up a large part of a company’s budget: up to 2% of corporate revenues. Further, the staff required to manage accounts receivable processes represents two-thirds of a company’s expenditures.
So saving money in this area, by adopting process automation solutions and invoice digitization, can only benefit a company. To convince you, here are 7 facts about accounts receivable and invoices that show the value of optimizing your accounts receivable.
7 enlightening facts about invoices and accounts receivable
- 66 days is the average time required for a business to receive money following a sale (Euler Hermes).
- 85 days is how long it can take for companies in the B2B sector to get paid (Euler Hermes).
- 1 company out of 4 is paid after 90 days (Euler Hermes).
- 10% to 15% of invoices require a payment reminder (Billentis).
- Close to half of B2B invoices are paid late (Atradius).
- 10% to 20% of late payments are due to incorrect information on the invoice (Atradius).
- 7% to 15% of invoices are sent to the wrong recipient (Atradius).
All of these figures point to a central theme: late payments from customers are a symptom of processes that have not been optimized and do not have all of the conditions for prompt payment.
To avoid these situations, businesses must tip the odds in their favour by avoiding errors, speeding up processing and establishing strategies to remind customers about their payments. An effective way for companies to ensure that all these tasks get done is to adapt their accounts receivable processes to better deal with this reality.
The benefits of optimized accounts receivable
Manual paper processes are one of the factors preventing companies from getting paid on time. So by digitizing and automating their accounts receivable processes, they can cut down on the average time needed to get paid. In fact, by reducing manual handling, their invoices will contain fewer errors and their workers won’t have to spend as much time checking and correcting information. The processing time will speed up considerably. Again, by sending electronic invoices, companies can ensure that their customers have received them on time, with all of the payment information included. It will also be easier for them to locate those invoices.
Lastly, improving accounts receivable not only cuts down on the average payment time and yields better cash flow; it also makes for a better customer experience. By spending less time on manual, repetitive tasks, the accounts receivable employees can spend more time on higher value activities and devote more effort to interactions with customers, for example.
Do you want to find out more about how you can optimize your accounts receivable processes? Visit our website to discover how we can support you in that endeavour!