P2P – The Uncomfortable Truth Revealed by Basware Research
Companies across the globe are missing out on the opportunity to make huge financial savings by introducing efficiencies in accounts payable. There’s nothing new in that. But it’s not just the opportunity to save cash by using P2P efficiencies that is being missed. Current practices are contributing to significant losses of cash! Money that should be in the balance sheet is hemorrhaging from the company coffers because of human error, data inaccuracy and and lack of integration between systems and the scale of loss should be cause for concern.
Basware, one of the leaders in Purchase to Pay solutions, has just published the results of some research into AP performance – the results are shocking and every CFO should be well aware of it. Despite the clear opportunities to make significant costs saving through the implementation of P2P process models current practice falls way short of what we might call “Best Practice Purchase to Pay”
Purchase to Pay – The Uncomfortable Truth
Basware talked to Accounts Payable heads in the USA, UK and Europe as well as Australia. There are 2 particularly interesting findings: 1. 30% of companies report missed early payment discounts and 27% incurring penalties for late payment; 2. 39% of companies manually match invoices with POs and only 5% use a Purchase to Pay (P2P) product to perform automated matching.
Is it just me or are these two findings connected in some way? Like cause and effect maybe?
This is a great research report and provides very clear evidence that the implementation of P2P doesn’t just help to provide a more efficient infrastructure. It doesn’t just provide a platform on which highly profitable techniques like dynamic discounting can be launched. It is invaluable tool in controlling leakage of cash.