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Delivering invoices like Christmas presents!

8th Dec 2016
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If cash and working capital is the life blood of a business, financial documents would be the signals from our nervous systems. We often forget that financial documents, whether it’s an invoice, purchase order or legal contract, keep businesses moving. So what happens when these documents are lost or blocked? This is when we can learn a few lessons from sending and receiving Christmas presents.

Think back to the last time you sent a present through a courier. To prevent it getting lost or being sent to the wrong person, you probably boxed it up securely, clearly labelled it and handed it over to the delivery company. They would have even provided you with a shipping code that allowed you to track that package right to final delivery. No questions or worry. Just clear peace of mind knowing where your package was at every step of the process.

Delivering financial documents electronically shouldn’t be any different. They’re integral to getting things done and making sure cash flows in the right direction. As such, they need due diligence in the way they are sent. Whether it’s a request for payment, a remittance or a job instruction, they all have one thing in common. If the document does not get delivered or seen, the process stops.

The worrying thing is that organisations continue on the same old path of sending out documents and hoping for the best. They have no real way of knowing if the intended recipient even received the communication, let alone acted on it. No wonder 60% of finance executives are disappointed in their Accounts Receivable (AR) processes and results, according to Aite Group research.

Meanwhile, our own evidence indicates that whilst 80% of credit notes delivered will be opened and read, 33% of invoices aren’t acted on. When the value of the latter is high or inertia extensive, the impact to the supplier can be significant.

While arguably not as fun as the games console you’ve gifted your young relative for Christmas, you still need to have full traceability of each document to ensure processes inside and outside of your organization to continue running smoothly.

Now, imagine if you were able to find out not only when it was delivered, but the exact moment it was opened.

Document traceability is the next logical step in the evolution from paper to an automated payment system. It solves the top 3 AR challenges virtually every organization today faces:

1. Lack of visibility into the status of receivables

Without document traceability, organisations don’t know the live status of any of the communication they have sent. So when 11% of vendors say an invoice wasn’t paid because it was never received (TermSync), there’s no recourse but to resend the invoice. But this triggers the billing process to start all over again and your payment collection rates suffer as a result. Document traceability makes it possible to have up-to-the-minute status of receivables, so you can avoid the payment delays, vendor relationship issues, manual intervention and significantly increased costs inherent in traditional models.

2. Inability to prioritise receivables

Not knowing if an invoice was acted on or received is bad enough. Not being able to identify the most pressing unpaid invoices is a critical error that impacts the productivity and effectiveness of your entire team. A robust document traceability solution would make it possible to immediately prioritise all exception handling, so your team can pursue the highest value invoices first, thus becoming more efficient.

3. Unclear cash position

Your business can’t run effectively if you don’t have clear, trustworthy visibility into your cash position. In fact, if a company doesn’t know where it stands financially, it becomes impossible to make sound decisions that drive growth. Document traceability eliminates the unpleasant element of surprise in the AR process. It accelerates payments by clarifying when each payment will be made, providing a clear view into the status of critical cash.

Document traceability technology goes beyond just making it possible for you to ensure that your documents make it to their intended destination. It helps you understand where your financial documents are at every stage of the process, which is critical to the success of your organisation.

So next time you send a present to a loved one, do take a moment do take a moment and think about the processes that have been put in place to ensure it arrives safely, and opened by the right person – and how this can be replicated within your organisation.

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