Securing payment for work done or products provided is one of the biggest headaches for businesses. Sadly, failure to do so has devastating consequences – according to the Federation of Small Businesses 50,000 business bankruptcies could be avoided annually if payments were made on time. Therefore, understanding when payment is likely to come and how this might affect a business’ cash flow is crucial information that can help suppliers circumnavigate the late payment minefield.
When you can’t track invoices in real time, significant issues arise. Data becomes irrelevant, trends become traps, payments can’t be processed on schedule and cash flow dries up. These are all causes of friction in the supply chain that can lead to major problems.
Despite the digital revolution, many companies are still using outdated methods to understand their invoices. According to Tungsten Network’s recent supplier survey of 2,700 businesses, 80 per cent of firms use technology such as Microsoft Excel, which take a huge amount of time and effort to input into and is limited in its analysis. Tools such as this are just not designed to dissect and understand complex, rich data sets. What’s more, SMEs don’t have the time or disposable cash to invest in their own in-house analytics function.
With advancements in technology such as data analysis and artificial intelligence (AI), there is a hunger among suppliers for in-depth scrutiny of their payments. In response, Tungsten Network has recently launched Analytics Accounts Receivable which automates the process and gives businesses an immediate overview of their invoice performance, tracking invoice progression all the way through to payment. Tungsten Network transforms the data on its platform, which is at the centre of millions of transactions, into actionable insight and makes it readily available to suppliers in a cost effective and hassle-free way. As a result, suppliers gain deeper insight into their cash flow so they can manage their finances more effectively.
Knowledge is power
When talking to suppliers, we found that 65 per cent of firms would see value in gaining more insights into their invoices. Understanding trends such as average spend by customer and country can help suppliers align themselves more closely with customers and strengthen vital supply chain relationships.
Businesses are always looking for efficiencies and smarter ways of working. Sometimes firms base their actions on a gut feeling or hunch which of course might be right or might be totally flawed. By automating the process and using advanced data analysis techniques, businesses can delve into the data that is hidden in their invoices and discover concrete savings based on facts such as paying too much tax. Tungsten’s new analytics service can help businesses assess whether the correct tax rate has been paid for their invoices, including a breakdown by country to monitor for cross-border discrepancies. This sort of insight would be incredibly hard to ascertain manually.
In today’s tough economic climate, businesses need knowledge which leads to actionable insight and the power to survive late payment hiccups and unpredictable cash flow. Thanks to advanced data analysis techniques and AI, the technology exists to make this intelligence available to suppliers, no matter how small.