Version One Advises the Importance of Document Management Following Findings that Late Payments to SMEs is up 40%
Document management and imaging company, Version One is stressing the importance of document management technology in helping to prevent overdue payments from customers. Research by Bacs Payment Schemes Limited (Bacs) has found that small and medium sized enterprises (SMEs) are now owed 25.9 billion after overdue payments rocked by 40% in 2008, up from 18.6 billion in 2007.
With overdue payments to SMEs increasing so significantly, Version One highlights the importance of the electronic delivery, storage and retrieval of financial documents, especially invoices, statements and proof of deliveries (PODs), in order to receive customer payments in a timelier manner.
Lynne Munns, General Manager of Version One says, It is hardly surprising that during tough economic times, organisations are delaying payments to suppliers for as long as possible. However, some suppliers are not doing themselves any favours by having inefficient, manually-intensive credit control processes in place. If organisations and especially SMEs are going to survive the downturn, getting cash in as quickly as possible with the help of the latest document management systems is crucial.
A frequent reason given by customers for not paying invoices on time is that they havent received the POD and/or the invoice. In fact, it can sometimes take weeks before a mislaid POD is finally located and a sales invoice can be raised. By scanning PODs and electronically delivering them to the customer with the corresponding sales invoice, not only are they received a day or two sooner than if theyd been posted, the customer cannot use the excuse that they havent received the invoice to delay payment.
With electronic document management, the time credit controllers spend pushing paperwork is also eliminated. By electronically delivering invoices, statements and PODs and having instant desktop access to all these documents, credit controllers no longer spend time posting documents, making copies of sales invoices and digging out customers original orders and PODs, allowing them to focus on actively chasing payments.
Munns adds, With the Bacs research identifying that UK SMEs are currently disappearing at a rate of 86 each day, urgent action is needed. SMEs need to carry-out a healthcheck of their credit control processes to ensure that they are operating as efficiently as possible, are electronically invoicing customers and are not writing off bad-debts due to lost PODs. Although organisations cannot control the effects of the economic downturn, improving cash collection processes is certainly within their power. If this area of the business is running inefficiently, it could result in their collapse.