Business recovery will be achieved through hourly payments
13 to 20% of companies still suffer from late payments. However, punctuality in payments will be the key to recovery. Collection software will be essential.
“Economic recovery will necessarily involve paying on time, if not sooner.” This is the conviction defended by Pierre Pelouzet, the Mediator of Companies, during a webinar organized by Esker: “Yes, the crisis is over, we are no longer on the considerable delays in payments observed in the spring of 2020”. In fact, at the same time last year, SMEs were paying with 18.6 days of late payment and large accounts with 8.1 days. Compared to 10.9 days and 8.9 days respectively in 2019. However, even today, “13 to 20% of companies continue to be paid late“. A major problem.
Restore customer confidence
At a time when inter-company credit represents 700 billion euros, Pierre Pelouzet, the Mediator of Companies, warns : “paying late kills the economy while paying on time, or even earlier, gives it a boost. A payment in advance of one day is equivalent to 1 billion euros injected into the French economy. On top of that, paying customers on time keeps their trust.” Generally having less cash, these subcontractors, mostly SMEs and VSEs, need toensure the working capital, WCR and DSO necessary to maintain their activity. “ Moreover, these same customers will prove to be essential at the time of recovery,” emphasizes Thierry Pralong, head of the accounting department at Chantiers de l’Atlantique.
Because paying your bills on time, or even earlier, is possible, 16 major companies have decided to set an example. Among them: L’Oréal, Michelin, EDF, Engie, Danone, Orange and Système U. They have committed to pay their invoices within 30 days instead of the traditional 60 days. This is a welcome boost, especially for very small businesses and SMEs, which are more fragile. All of them have set up an accelerated payment system applicable even in times of crisis and teleworking.
Tools and people
For Thierry Pralong, there are three really effective ways to speed up payments: dematerialization of processes, invoice traceability (which makes customer relations more fluid) and simple dashboards.”The traceability allows toavoid any conflict with the customers. When a customer calls me to ask about the status of their bills, within two minutes we can give them a credible answer.” he guarantees. Finally, “simple dashboards are useful to estimate the number of invoices to be processed each month and thus adjust the number of accountants needed to pay all its invoices on time”.
“Being in control of these administrative processes means being able to decide when I pay my suppliers,” says Emmanuel Olivier, CEO of Esker, which specializes in document dematerialization. The mistake not to make is to believe that with the implementation of an IT system, I don’t need my employees anymore,” says Pierre Pelouzet.. We always need people to respond to customers when there is a dispute, a difficulty, or to recreate that bond of trust. If what we gain with technology is reinvested in people, we have understood everything. These dematerialized processes have also “allowed us to revalue the function of accountant, since today an accountant really does accounting and much less administrative work” continues Thierry Pralong.