How cloud based technology could solve the late payment problem
The frustration and uncertainty that late payment brings is a constant issue for many businesses, especially small and medium sized enterprises (SMEs) who are often affected worst of all. According to UK electronic payment transfer provider BACS, the late payment debt burden is around £46 billion, with £39 billion of that being owed to SMEs.
Cloud-based tools to solve the issue
At best, late payments are stressful and time consuming to chase, at worst they can open up a cash flow black hole that can be irretrievable.
To improve the situation, Christian Lanng, CEO of Tradeshift, has developed a cloud-based transactions and collaboration platform that links customers and their suppliers. The system allows businesses to easily check the progress of their invoices, and they can also quickly see when it has been received or approved. The platform not only makes business functions more efficient, it also allows teams to remain connected when away from the office, which fits in with the growing trend for flexible workforces.
Encouraging improved communication
There is also a social element to the platform, where users can interact with each other to confirm details and solve issues. This means it is quick and simple to communicate directly with the right person, rather than spending time finding out who it is you need to chase. This encourages a transparency of information exchange electronically, which is a highly useful tool for effective credit control.
Faster payments, better cash flow
Embracing this new technology could prove to be positive for process improvement as well as quality control, as invoices will be dealt with by an automated service. You should therefore encounter fewer delays when processing payments and distributing invoices, as the process becomes more structured and consistent.
The platform is free to suppliers, making it a cost effective, low-risk way of streamlining your credit management approach while mitigating credit risk.
Of course, there are many reasons for late payment and this solution will not solve all of them. There are much wider issues that technology can’t address, such as companies being delayed by the volume of invoices received or large buyers negotiating longer than optimal credit terms to boost their own cash flow. But the main issue of communication can be massively improved with this system, and when it comes to business relationships, that goes a long way.
Do you want to know what the future holds for Credit Management and how to adapt towards these influences? Go directly to our download center and download the eBook for free!