Invoice management remains a pivotal process for the vast majority of businesses.
Get bills right and your team will keep rolling smoothly – not to mention your cashflow.
Get it wrong and you face a wave of problems that will slow any company’s momentum. Late fees, unhappy suppliers, delays, accounts that just don’t add up. Take your pick.
We’ve long had our eye on this process as something that we could hopefully change for the better. But our ideas mean nothing without the input of the people who will use the product we make.
So welcome to our latest Pleo Insights report, where we’ve asked hundreds of finance admins about their invoice process.
This report is based on the results of a recent survey conducted by Pleo with a total of 392 respondents (198 admins and 194 end users) based in the UK.
Invoices account for more than half of all spending for most companies
There you have it, the importance of invoice management in black and white. But drill down a little more into the stats and you see something even more striking.
49% of the businesses we surveyed said bill payments make up a whopping 75% of the money their team spends – or more.
That means that for almost half of all businesses, spending = invoices.
64% say the finance team is responsible for paying bills
When it comes to big invoice purchases, it seems the one team still maintains the final word at most businesses: Finance.
While C-level managers (17%) or individual team leads (12%) play a role at some companies, for 64% of businesses, it’s the finance team with ultimate sign-off.
In one-in-three firms, only the finance team is trusted with payments. No pressure.
Of course, this responsibility can also leave the finance team with some extra headaches to solve. For a start, they’re often not the point-of-contact for an invoice, so there’s a lot of chasing involved to even get their hands on each bill.
In some cases, they’d also benefit from a little more visibility over purchases before they settle up with suppliers. And that’s before we even get to the manual data entry required by so many invoice processing systems.
Because guess what?
Bookkeeping is the most inefficient part of the invoice management process, according to the admins we surveyed.
What are people paying for?
It’s not hard to spot the growing reliance of so many industries on different software tools, managed through monthly or annual subscriptions.
In fact, software now makes up the biggest invoice spend category at the companies we spoke to.
Not far behind are some old familiars: utility bills, internet, phone and rent.
And office supplies (36%) still score highly – something that’s likely to increase as British businesses start to return to the workplace this year.
Admins think managing bills is too manual and time-consuming
Invoice management software has meant some positive changes for the businesses that use it – the problem is it still relies on a lot of manual work.
Our survey bears that out, with 55% of admins saying they process and pay invoices manually.
We asked people to choose the words that came to mind when they looked at their invoice process.
For 32%, “manual data entry” was an accurate description. For 29%, it was “time-consuming”. Spare a thought for the unfortunate 14% who opted for “tedious”.
But how many plumped for “convenient”? Only 16%. That’s pretty telling, we think.
94% of admins have received duplicate invoices
Nobody enjoys the moments when you realise that an invoice looks suspiciously familiar and scramble to see if it’s already been paid.
But with manual data entry or confusing approval flows, it seems to be unavoidable.
30% of businesses are forced to make late payments
Paying invoices late has consequences. It ticks off suppliers (to put it mildly) and normally racks up a fee. But sometimes, the tangled process of invoice management makes it easy to miss a payment cut-off.
Other times, paying late is a necessary evil. Control of cashflow is the main reason why people pay after the money is owed, with 32% choosing that over other reasons like waiting for approval (24%) or a lack of oversight (5%).
Whatever the cause, 30% of businesses admit to paying late at least once a year. In fairness, 52% said they’re never late with a payment – and if that’s you, nice work.
People are ready for a change in how they manage bills
Finding out the problems that invoice management can cause for businesses is just one part of the process.
The other part is to develop a solution that could ease some of that pain and offer a truly modern approach to processing and paying invoices.
Good news – 90% of the people who took our survey would like to see a tool that helps them manage expenses and bills in one place.
Introducing Pleo Bills
With that in mind, we can’t wait to show you what we’ve been working on.
Coming soon: Pleo Bills. It’s a way to manage and pay your invoices that gives your finance team the visibility they need and wins back time for everyone in your company.
In April 2021, we’ll be rolling out Pleo Bills to our UK customers. Soon after that, we’ll make it available across all of our different markets.
And like any of our features, we’re going to keep building and improving it.
Because invoices might be pivotal, but they don’t have to be painful.