New data examines the biggest challenges facing finance teams in 2022: increased fraud, talent retention, late supplier payments and relationships with procurement
London, October May 2022 /PRNewswire/ — Financial professionals estimate that each business in the UK loses more than £295,000 a year to invoice fraud. Even more shocking is that one in five (20%) financial professionals do not know or even estimate the cost of invoice fraud to their business. This lack of visibility may be due to the cluttered paper trail that continues to plague the invoicing process.
As invoice fraud increases, the question arises, who in the business is responsible for preventing invoice and payment fraud? In more than half of organizations (56 percent), there is no shared responsibility between finance and IT.
To get a complete picture of the challenges facing the finance sector, Medius partnered with Censuswide to recently survey 2,750 senior finance executives worldwide, including 501 in the UK.
UK finance teams face world’s highest attrition rate
As finance teams are under increasing pressure, they are faced with high staff turnover and the challenge of recruiting qualified staff – a problem that is particularly acute in the UK. Nearly 20% of financial professionals in the UK leave after seven to 11 months, nearly 10% higher than any other market surveyed. Globally, the average tenure of a finance team is 30 months.
Finance professionals are a particular flight risk if businesses are struggling with high employee turnover. In the UK, 27% said their finance department was so busy that they were worried about colleagues leaving, and 26% reported a high rate of team attrition. One of the issues reported by finance teams was the nature of the work – 21% felt their jobs were mostly tedious tasks, and 36% of professionals felt they were using outdated payment software.
London Falls behind the UK in financial automation, has implications for payments
at the same time, London It lags the rest of the UK in automating the finance sector, with only 25% of respondents tracking and measuring their automation practices. In contrast, 31% of UK finance departments track and measure automation, rising to 33% in large companies and 43% in the US – leading the world in automation practices.
As a result, more than a third of finance professionals (39%) say they are unable to close bills on time, and paying supplier invoices remains the biggest challenge faced by 39% of UK corporate finance departments. In addition, global businesses took the longest to process invoices in the UK at 27 days, 13 days longer than the UK. Denmarkan average of only 14 days.
Client Professionals Admit 51% of Supplier Payment Delays
In the UK, client professionals admit that the majority (51%) of suppliers are late in payments, lower than the global average of 56%, but comparable to Finland, of which only 44% of suppliers are late in payment. Meanwhile, 98% of UK businesses say they want to take advantage of early payment discounts, and 79% of businesses offer early payment discounts themselves.
Deciding when to pay suppliers has a direct impact on cash flow, but it can also damage supplier relationships and the company’s external reputation. In 2017, the Department of Business, Energy and Industrial Strategy introduced new requirements for large companies to self-declare supplier payment data in an effort to increase transparency and help business decision-making.
Relationship issues: 39% say it will cost the business cash
According to the report, one of the most prominent issues causing suppliers to delay payments is the relationship between procurement and finance. A healthy relationship between procurement and finance can transform an organization, while a poor relationship can lead to missed opportunities for supplier discounts, increased errors and time spent managing payments, lack of transparency and oversight, and damaged relationships with suppliers .
In the UK, 72% of respondents said they either did not work in procurement at all (32%) or only occasionally (40%).When they do collaborate, 51% of respondents in the UK say they are dissatisfied with the collaboration, with the highest levels of dissatisfaction across the market – at the other end of the scale are Denmarkand only 4% of respondents were dissatisfied with the relationship.
Jim Lucierthe CEO of Medius said: “Invoice fraud is on the rise, and global supply chains are becoming more complex. Finance and AP teams face numerous challenges in an increasingly complex business environment. They need technology to move from automation to elimination – eliminating invoicing, fraud and waste. time”
Kevin PelmentIDC Research Director for Financial Applications, commented: “Over the past three to five years, we’ve seen finance and procurement teams play a game of ‘whack-a-mole’ as they deal with global economic volatility and the rapid digitization of processes. Not surprisingly, they’re working hard to keep up” with customer expectations Constant change, increased risks and vulnerabilities, and challenges posed by global supply chain issues. It’s a tough environment for even the strongest team. “
About data
Conducted by Censuswide, a total of 2,750 senior finance executives and above make final decisions and/or take ultimate responsibility for financial matters in organisations with more than 50 employees in the UK (501 respondents), U.S. (1,004 respondents), Australia (352 respondents), Finland (126 respondents), Denmark (103 respondents), Dutch (306 respondents), Sweden (255 respondents) and Norway (103 respondents).The investigation is between 27.04.2022 – May 10, 2022. Censuswide adheres to and employs members of market research associations based on ESOMAR principles.
About Medius
Medius connects invoice capture, processing and payment to replace the worries and doubts of managing AP with calm and confidence. Medius does most of the work by using artificial intelligence, going well beyond basic automation – so invoices are confirmed, coded and paid; AP teams can go home and rest; and businesses can trust their budgets and forecasts. Visit medium.com for more information.
For more information, please contact:
Francesca Cahillfight or flee for Medius
[email protected] / +44 330 133 0985
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