ALmost three quarters of financial directors surveyed by the David Lewis Consultancy are planning to adopt Internet-based purchasing and payment systems in the near future.
The results of the survey, conducted with 100 financial directors of companies with an annual turnover over £160 million, show that financial directors feel that electronic procurement will be adopted by businesses more rapidly than previously anticipated.
Ninety-seven percent of financial directors believe their company can make further efficiencies in their procurement supply chain. When questioned about their internal processes, 93 percent say there is plenty of scope for saving money by improving efficiencies. However, 68 percent of respondents expect pay back on an electronic procurement system to take six months or longer.
Kathy Palmer, managing director at Clarus EMEA comments, “In line with many analysts, Clarus believes that electronic procurement adoption rates will soar over the new couple of years. This is due to the emergence of software solutions that offer fixed price licensing (as opposed to transaction-based fees), and the success of rapid deployment systems that have already demonstrated a return on investment in a matter of weeks. As the B2B market moves to mass adoption, the benefits will be quickly realised by businesses and marketplaces alike.”
The overall expense of processing and distributing paper records is increasing and financial directors are looking at ways in which to minimise these costs. Although 56 percent of respondents do not know how much it costs to settle an invoice, the majority of them perceive online payment to be cheaper.
Palmer continues, “We foresee far greater efficiencies in the financial transactions associated with a company’s supply chain...These efficiencies include the elimination of the costs of paper invoicing and cheque runs, as well as the cash-flow advantages of reducing debtor days and being able to make contingency plans at the instigation of any payment, receipt or collection.”
Equally important, adds Palmer, is the understanding that online purchasing, as opposed to credit card payment, will ease potential cash flow problems and control current financial issues such as double payments. She says financial directors are using company credit cards less today as a routine online payment vehicle to suppliers and customers.
Nearly two thirds of all financial directors questioned report that their companies are taking online payments or considering doing so in the near future.