In this guest post Sid Vasili, CEO of Invapay, highlights the benefits of news ways of working.
The decisive way to save your organisation mone
I’ve come to the conclusion that an increasing number of organisations have lost the ability to make decisions. Self-preservation and politics have overtaken the desire to be innovative or take risks and I think the bruising events of the last five years are the main reason. Obviously, lots of companies are still moving forward but there are an increasing number who are stuck, fearful and defensive.
Standing still is simply the resignation of the slow demise of a company. The retail sector is littered with examples of those that buried their heads in the sand in the face of the internet. No strategy to adapt. No plan to evolve. Just squabbling amongst executives as their indecision took them slowly towards the abyss. We see this all the time in the world of cash management and payments, where people refuse to grasp the massive changes occurring around them.
At this moment there is one simple truth about the way corporations manage B2B payments. It is this: We are undergoing the largest revolution in the way business to business transactions occur. Those that don’t adapt soon will face a catastrophic drain on their working capital, which will take them closer to the edge.
But is anybody listening? The answer to that is yes. Lots of people listen and agree. Are people doing something about it? The answer to that is no. Executives are locked in an energy-sapping power struggle which resembles children in a kindergarten arguing over toys. Most of them, to be honest, need hitting over the head with Buckaroo. They need to plan how they will adapt to the changing world.
We work globally with many organisations which are adopting new ways of working. I want to highlight some examples of the benefits to bring this to life.
Potential Government Savings of over £2bn annually
I was interviewed as part of a government report into cost saving in central and local government. The report, led by the forward-thinking MP Stephen Partland, investigated the savings that can be made if there is wholesale take-up of e-invoicing with government suppliers. The benefits are massive. As someone who advocates the use of e-Invoicing I wasn’t surprised. Here are some of the headline numbers from the report:
– e-Invoicing could save the public sector, and its suppliers, a minimum of £2 billion per annum.
– NHS Supply Chain is increasing the number of suppliers and volume of electronic invoices. The initiative has achieved directly attributable savings of £15.6m to their operation.
– A similar initiative in Denmark will save the Danish government €30m.
The report can be found here.
Benefits of e-invoicing
e-Invoicing has been around for about 30 years. I think it is nuts to have people posting pieces of paper to each other or emailing pdfs for manual processing. This adds a layer of inefficiency that can be quickly removed. There is wasted time, an increase in processing errors and you are asking people to do menial tasks computers can do in seconds. It’s crazy. There is no doubt that these individuals could be put to better use in their workplace.
The list of benefits to using electronic invoicing is large but the main ones are;
– There is no requirement to sort through paper work and rekey information.
– All calculations are automated which removes the prospect of human error.
– There is no need for individuals to take calls from suppliers seeking updates. All the information is held within an online portal so payment dates and the value is instantly visible.
– The efficiency improves forecasting, and cash management, which can avoid short-term borrowing requirements.
– There are no paper, postage and storing costs.
– The systems don’t need IT investment. e-Invoicing systems are cloud based and easy to implement.
But of course time has moved on and “self-billing” seems to have overtaken eInvoicing as a more optimal solution to drive out costs for buyers and sellers.
How to overcome the barriers to evolution?
When we have implemented our system, we work hard to help clients secure the benefits that can be quickly realised. Our advice is this: You have to find a champion in the organisation. You sit down with them and work through the obstacles they need to overcome to get a hearing. These are usually political – someone somewhere stands to lose power or a treasured process. You help your champion map a strategy to address, overcome and get round the barriers. It’s usually hard and patient work but if you don’t invest in it your ambitions and good intentions are about as much use as a chocolate teapot.
Yet, indecision remains.
I have been speaking to one company, on and off, for about six years. They have had changes in management, concerns about the recession and can’t decide whether it’s the right thing to do. The figures above, as an illustration of the saving, demonstrates the opportunity cost of procrastination.
And yet this procrastination, and the long decision making process, can stop the very projects which can save time, money, and jobs.
The opportunity is there now
Having a portfolio of good ideas that people are working on with a view to developing a better functioning organisation is the right way to go. And, at this moment, I think there is no better decision than removing inefficiency from outdated processes. E-invoicing isn’t new. Nor is it difficult to implement but the benefits of self-billing are tangible and instantly achievable with current technology.
So, stop waiting. Stop taking part in the power struggle and devote a little time to looking into a project that will yield real benefits for you, your suppliers and your staff.
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