UK businesses are wasting on average £88,725 every year through outdated payment practices, claims a report.
Tungsten Network’s inaugural Friction Index report, which covered 442 firms around the world, found that a total of almost 6,500 man hours are wasted annually due to paper-based manual processes, chasing invoice exceptions, discrepancies and errors and responding to supplier enquiries.
Tungsten said an average of 125 hours a week are lost to "friction", which if multiplied over a year by a UK average hourly pay rate of £13.65, resulted in the £88,725 figure.
Bigger businesses that employ over 1,000 workers experience more friction that their smaller counterparts.
Larger companies are more likely to deal with international suppliers that involve additional tariff and compliance issues. A lack of automation burdens account departments with unnecessary time-consuming activities.
Rick Hurwitz, Tungsten Network CEO, said: “Numerous processes in the financial world remain cumbersome and time-consuming when they needn’t be. Technology means we can do away with the tiresome and menial tasks that clog business workstreams and instead boost productivity and efficiency."
He said he was "surprised" that businesses failed to streamline their payment processes in a digital age where suitable technologies are available.
Less than a third of businesses in the index believed their position had improved compared to six months ago.
Over a third, mostly businesses employing over 1,000 people, put friction resolution as a top priority for 2017.
Friction is a shared global problem, said Tungsten. International companies experience issues at almost the same rate, with US businesses reporting slightly more issues than the rest of the world.
“If businesses aren’t tied up chasing invoices or receiving phone calls from suppliers doing the same, they have more time to explore opportunities for growth with existing customers and go after new ones. If all the data from past invoices is easily accessible, opportunities to identify variances that will target inefficiencies are more visible," said Hurwitz.
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