- Late payments cost businesses 24% in lost orders
STOCKHOLM, June 2, 2021 /PRNewswire/ -- Research from Medius, a leading provider of cloud-based spend management solutions, reveals that damage to supplier relationships caused by late payments is costing businesses 24% in lost orders.
The market research from Sapio surveyed the views of 200 finance and 200 procurement decision makers in the UK to explore the risks to supplier relationships as the purchasing process transitions from procurement to finance.
Almost three quarters (73%) of procurement professionals admitted that their supplier relationships had suffered due to late payments. 59% said their vendors had reduced or stopped discounts because their invoices were being paid late; 62% had experienced goods or services being withheld until invoices had been paid; while 55% claim a business had refused to work with them again.
One procurement professional told us that "Finance is consistently paying our vendors late which causes problems for procurement," while another said, "Finance only talks to procurement when they have a payables issue."
Finance claims their businesses have experienced the impact of damage to supplier relationships, with 27% claiming that the reputation of their organisation has suffered; 28% said that it has caused a breakdown in relationships between themselves and procurement; while 24% claim that these issues have caused customers to cancel orders.
The research suggests that the reason payments are being made late begins at the start of the supplier relationship, with over half of respondents claiming that vendors struggle with the onboarding process. 44% of finance professionals admitted they would like to work more closely with procurement to make the onboarding process easier.
Daniel Saraste, SVP Product Strategy, Medius said: "This research clearly shows that late payments are causing significant issues for both procurement and finance, causing the business to lose money and even in some cases causing damage to business reputations.
"While it's procurements role to maintain strong supplier relationships, finance's priority is to ensure the organisation is in the best cash position, meaning the timely payment of invoices isn't a top priority. Without a common view of what's important and why, procurement and finance will continue to find themselves at odds with each other.
"The good news is that the research shows that two in five respondents claim that finance and procurement have a good working relationship but admit there's room for improvement and better communication between the two departments.
"Both business functions agree that they see the benefits of integrating eProcurement and accounts payable automation to smooth both purchasing and payment processes and ensure prompt payment processes."
To find out more about this research, please visit medius.com.
For more information, please contact:
Fiona Whyatt, Skout PR (for Medius)
Fiona. whyatt@skoutpr.com
This information was brought to you by Cision http://news.cision.com
The following files are available for download:
https://mb.cision.com/Public/18940/3359360/9560a784cc8f82a0_org.jpg | Daniel Saraste |
https://mb.cision.com/Public/18940/3359360/b0f40a0bc7be4574_org.png | supplier-journy-report-min |
