md3d - stock.adobe.com

Businesses losing out on early payment discounts due to outdated software

Chief financial officers need to upgrade their accounting software to benefit from discounts available for paying suppliers early

Businesses in the UK are failing to take advantage of billions of pounds’ worth of early payment discounts offered by suppliers because their accounting software is out of date.

Research carried out by Barclaycard found that out-of-date accounting software was not able to automate payments to meet supplier conditions for an early settlement discount.

Barclaycard used economic modelling to calculate that UK corporates currently save a total of £14.4bn in early payment discounts each year, which equates to an average of £75,389 per business. But there is £6.7bn more available that is not being taken up.

The study found that 22% of businesses were using out-of-date accounting software. Some 40% admitted software had not been upgraded for five years because of resistance to change.

Marc Pettican, managing director of Barclaycard commercial payments, said this needed to change, and chief financial offers (CFOs) should drive this.

“Our research shows that CFOs who embrace technology not only achieve tangible savings for their organisations, they also streamline business processes and paperwork, even when faced with resistance to change,” he said.

“CFOs who embrace technology not only achieve tangible savings for their organisations, they also streamline business processes and paperwork, even when faced with resistance to change”
Marc Pettican, Barclaycard

“The latest innovations in B2B payments, such as integrating payments directly into the procurement journey, can save finance teams significant time and effort, helping them capitalise on early payment discounts more often. CFOs play an essential role in advocating and piloting these new technologies, helping their organisations to stay one step ahead of the competition.”

With trillions of dollars paid to suppliers globally each year, there is a big opportunity to make the payment process more efficient. This is not lost on financial technology (fintech) entrepreneurs, which have targeted the payment of invoices as an opportunity.

For example, Previse, a fintech provider founded in 2016, offers a platform that harnesses machine learning and huge historical datasets to identify the likelihood of invoices being paid on time and automate payment of the 95% that are not identified as being problematic.

Ensuring invoices are paid early keeps money flowing in the economy and helps smaller firms grow. Meanwhile, large companies can save huge sums of money through early payment discounts.

Read more about invoice payment software

Read more on Business applications

Join the conversation

1 comment

Send me notifications when other members comment.

Please create a username to comment.

Oxygen Finance has been providing technology and services to companies wishing to enhance their ability to capture early payment discounts for over ten years with clients receiving discounts in a fair and transparent manner without pushing terms back for suppliers. The UK public sector is leading the way in early payment - driven not only by a need to save money in the face of continued cuts but also by a desire to support their local economies and create more sustainable supply chains.
Cancel

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close