Late payments weigh on companies' cash flow and impact their working capital requirements. In France, they are responsible for a quarter of all business failures. Electronic invoicing makes it possible to accelerate invoice processing and, consequently, to reduce payment times. It also responds to the need to optimise the financial management of businesses, especially of customer and supplier items, in order to better forecast and anticipate cash flows.
Respect of your suppliers' payment deadlines
Since their creation, AP Automation solutions have been helping to eliminate payment delays due to data entry errors, lost documents, lack of fluidity in the validation process, delays in invoice approval (and therefore payment), etc.
Thanks to artificial intelligence and machine learning technologies, they can now :
- Capture 100% of invoice data (regardless of their format);
- Achieve an automatic reconciliation rate of up to 87% (with or without purchase orders);
- Automate exception handling;
- Implement intelligent validation circuits based on invoice data for those invoices that require manual processing;
- Reduce the time it takes to process and approve invoices from weeks to days, or even less than 48 hours in some companies.
Automating the processing of incoming electronic invoices therefore eliminates the risk of late payments (and associated penalties) and makes it easier for your suppliers to meet their deadlines.
Optimised accounts receivable management: shorter payment terms
Electronic invoicing is also key to ensuring that your customers respect the payment terms you agreed with them. Your outgoing invoices are received and processed more quickly, which speeds up collections. The ability to automate reminders for unpaid invoices limits late payments and even anticipates potential litigation (collection of unpaid invoices), which is costly for the company.
If handled more efficiently, customer receivables management can limit the amount of outstanding receivables, thus helping to reduce your company's working capital. In addition, your company benefits from a "solid financial management" image with the banks, which is a condition for obtaining more advantageous financing conditions.
Real-time cash and working capital management
In addition to optimised accounts payable and receivable management, electronic invoice management systems provide finance departments with complete visibility of invoices issued and received, and the associated payments. All financial data is centralized, which simplifies analysis capabilities (particularly of risks), facilitates the monitoring of accounts receivable and payable, and enables the anticipation of cash flows as well as cash surpluses or shortages.
The quality of the financial information resulting from the complete digitisation of the invoicing process is an undeniable advantage for making informed decisions in terms of cash management: forecasting working capital requirements –and its possible seasonality–, managing and investing (even occasionally) cash surpluses, etc.
Lastly, the accelerated processing of customer and supplier invoices opens the door to new possibilities in terms of cash management, and in particular the negotiation of discounts for early payment.
If you’d like to discuss your needs with our experts and how Basware to prepare your company for e-invoicing mandates, contact us!