Default interest – wasted money

Each year you pay hundreds of pounds in default interest on invoices with exceeded payment deadlines. Much more than should be the case. And in spite of you having negotiated fair payment terms with your suppliers. After all, the default interest is money out of the window. At the same time, they are a clear indication of possible improvements.

The reason for the default interest is that your supplier invoice processing time is too long. Very simple. But the problem is that it is often unclear in each case who in your organisation should attest, approve and enter the invoice. Maybe not on paper but in practice. And you often lack a good grasp of where the invoice is when it has been received. The guidelines may not be completely in place and above all lack the relevant IT supported procedures. This means that in many cases you are in reality not able to say how you perform a given invoice processing. You lack a predictable and quality-assured process.

The recipe

The solution to the challenge of the default interests is not far away.
The recipe is:

Introduce efficient and streamlined processes following best practices.

Apply a user-friendly Purchase-to-Pay solution. Among other things, it ensures timely invoice payment and saves each employee precious time every day.
Measure the concrete saving on the interest burden and measure the processing time improvement. It gives employees at all levels more time for the real tasks.
The reward is savings on the bottom line and more efficient administration procedures with a higher quality level to the benefit of the entire organisation. And much more…