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Overcome your prompt payment woes and supercharge P2P efficiency

We delve into prompt payment in procure to pay, and how to increase your prompt payments to ensure compliance with regulations and code.
person on their laptop with an invoice on the screen. A purple paid stamp is over the top, to signify prompt payment

At FISCAL Technologies, we know how crucial prompt payments can be to an organisation. Not only are they integral to your business to keep supplier relationship strong, but non-compliance to prompt payment regulations can result in fines and reputational damage.  

The fallout of failing to pay promptly. 

An example of this is Holland & Barrett, who, in 2019, were named by the Small Business Commissioner for failing to pay a small business £15,000 within agreed payment terms of 30 days, in the end paying 37 days late. This ultimately led to a press release being published on their supplier payment practices, detailing a summary of their delay in payment, their refusal to engage with the commissioner, and included a warning to suppliers looking to work with the company. 

In today’s social media climate where the knowledge of misconduct spreads quickly, such bad press can cause boycotting and a customer mass exit. Further, if a key supplier finds this and refuses to supply you, service fulfilment issues are sure to follow as your team scramble to find a replacement supplier. 

Why do we fail to pay promptly? 

We know that there are many ways that payments can be obstructed, and that much of the time it really comes down to data and processes. From invoices being inputted incorrectly (by computers or by human error) to rogue purchase orders, to duplicate suppliers. These can cause many headaches, including late payments and unhappy suppliers. 

What can you look for to increase prompt payment? 

Probe the ordering cycle to find efficiency improvements.

How long does it take between a purchase order being created, goods to be received in, and for the supplier to be paid afterwards? Where might you be able to improve efficiency? How often does your process rely on time-consuming duties and human input?  

Reduce transactional errors.

How much time does your team spend on finding, investigating and amending exceptions? And how much does this hold up your team? We recommend using technology like our own software to automate these checks at once when they enter your ERP software, making checking less time-consuming and increasing early intervention so you can keep to time. 

Cleanse supplier file data regularly.

An incorrect supplier file, or one with multiple listings for the same supplier, can have a huge effect on your transactions. A purchase order or invoice may be attributed to the wrong vendor on the system, triggering duplications and confusion that creates time delays. Alongside the existing data, you may like to double check your onboarding or induction process for your vendors, ensuring that members of staff follow the process, or altering the process where needed to ensure duplications do not take place.  

Opt for a faster payment type.

In MineralTree’s ‘State of AP Report’ 35.6% of accounts payable teams said they make 51% or more of their supplier payments via cheque. These can easily be lost in the post, or simply sit in someone’s mail waiting to be opened. There is also no way of knowing when the cheque will be cashed, which makes cash flow planning far more difficult. Opting for electronic payment methods allows your team to ensure the supplier receives it quickly, and it can be made the day of approval if necessary. Reducing your cheque payments also lessens your fraud risk – a bonus! 

Reduce disputes.

A large amount of time is taken up with contacting suppliers and resolving disputes. In fact, the PPN (Purchase to Pay Network) Annual Survey 2023 told us that 32% of respondents felt they spent most of their time talking to suppliers on the phone and dealing with supplier portals. To help with this, ensure your data is as correct as possible, and keep vendors informed regularly to lessen long-winded phone calls. 

Examine your reports.

We recommend using your reports to find where snags take place, whether that is in your process, or with specific suppliers. Keeping a tight grip on your Days Payable Outstanding (DPO) is also ideal. The careful balance between increasing cash flow and working capital and paying vendors on time is a difficult one to master. But, when your process time echoes your DPO, and that number falls just below your payment terms for that supplier, you’ll know you have it right. 

A screenshot of the FISCAL software, showing transactional risk, a control to alleviate missed risks in 3-way matching
Our software provides you with in-depth analysis of your transactions, so you can complete prompt payments with maximum accuracy.

How FISCAL can help you increase prompt payments. 

It’s simple, really: We help you cleanse your supplier data and find transactional errors before the payment run.  

Our software uses artificial intelligence (AI) to find erroneous supplier information and transactions, including duplications. With our continuous analysis, you have peace of mind that transactional discrepancies are discovered quickly and can be rectified before the payment run. Your team can then pay suppliers correctly, on time. 

The platform also includes custom reports so you can identify process inefficiencies in your payables and beyond, helping to hone your operational effectiveness. 

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For further information or to request a demo:

Would you like to know more about what FISCAL can do for you? Contact us at:
[email protected] or call +44 (0) 845 680 1905

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