Accounts receivable (A/R) professionals are using more electronic invoicing (e-invoicing) and less paper to expedite the collections process, and also believe the economy is improving, according to the second annual survey by e-invoicing network OB10 and International Accounts Receivable Professionals (IARP), a not-for-profit guidance-setting association for the A/R profession.
The survey respondents – which include chief executive officers (CEOs), presidents, owners, chief financial officers (CFOs), and A/R directors and managers from a wide variety of organisations – indicated they are submitting more invoices to their customers electronically this year compared to the previous year. These professionals also stated that more predictable payment from customers is still critical to maintaining the cash flow of their organisations.
With regard to collections, more than half of the professionals (59%) reported that they are calling customers more often to receive payment, similar to last year’s result (55%). Additionally, respondents reported an average days sales outstanding (DSO) of 33.5 days – lower than the average DSO of 36.1 days reported last year.
“Of the many insightful data points resulting from this survey, two key items illustrate how A/R professionals feel about invoice submission methods available to them,” said Peter Watson, senior vice president (SVP) for OB10. “The first is that 76% of the respondents believe e-invoicing expedites the collections process, and the other shows that e-Invoicing was the only invoice submission method growing in use year over year. I believe the number of companies transitioning to electronic invoicing will continue to rise, partly due to many A/R professionals being only somewhat satisfied with the results of their collections efforts and the vast majority being receptive to electronic methods of invoice submission.”
In terms of economic outlook, the survey indicates that respondents believe the economy is showing signs of improvement. About 43% reported that the state of the economy negatively impacted their business, compared to 65% from last year’s survey. When asked, 83% of the respondents stated they expect the economy to improve in 2011, compared to only 6% who expect the economy to get worse.
“The results of the data confirm what we already suspected – that the economy has made noticeable strides and appears to be on its way to recovery,” said Thomas Bohn, president and CEO for IARP. “Almost 60% predicted that their companies would do better financially in 2010 compared to the previous year. Now that we’re able to look back and accurately assess, about the same percentage have indicated that 2010 was indeed a better year than before. This illustrates how valuable A/R professionals are in understanding the financial health of their companies.”
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