When sending an important parcel through a courier, you wouldn’t want it to get lost or end-up with the wrong individual. Think about the last time you’ve sent a birthday present through a courier. You’ve personalised the package, labelled it up with the
right name and address details before handing it over to the delivery company, ensuring it’s fully traceable. Now imagine if you’re able to find out not only when it’s been delivered but the exact moment when they have opened their birthday present.
Delivering electronic financial documents, whether it’s an invoice, purchase order or a legal contract is no different. In business, documents are much more than just a worthless printed matter or electronic pieces of paper. Each document possess value.
It has a place of origin, content, receiver and destination. Of course, in the business world, each document can pass through many stakeholders, so having visibility of the audit history saves time and reduces disputes.
Ultimately a document forms part of a process. They’re either a ‘Request for Action’, such as requesting payment; ‘For your Information’, such as a remittance; or an ‘Instruction’, such as a job card to the shop floor on how or when to produce something.
If the document does not get delivered or seen, the process stops. Evidence indicates that whilst 80% of credit notes delivered will be opened and read, 33% of invoices aren’t acted on. When the value of the latter is high or inertia extensive, the impact
to the supplier can be significant, causing payment delays, relationship issues, manual inefficiency and increased cost.
Key to optimising working capital
Being able to view the delivery and action taken on an email or document is already available to businesses. In fact, marketing departments have been tracing emails for years, so applying this same level of visibility and insight to financial documents,
is arguably even more important and should be common sense.
Document traceability offers the next logical step from the paper to automation switch. It provides insight into processes outside of a business’ own four walls, providing a clear audit trail into the delivery journey and the action taken once it arrives.
In particular, the ability to trace the values of documents, helps finance departments to prioritise high value, un-actioned transactions. After all, a birthday card with a £500 voucher would attract a different level of care and attention compared to a £5
This insight enables finance departments to mitigate cash at risk, encourage quicker payments from customers and more importantly, helps optimise working capital – the lifeblood for every business.
Without this visibility, essential financial documents and instructions that need to be actioned may lead to payment delays and issues of all sorts. We also often forget that an efficient accounts operation helps reinforce good customer relationships. If
an invoice isn’t delivered to the right individual and the customer has unwittingly not paid, the supplier may cut off access to their service. And of course, this works vice versa with a company’s own suppliers.
Although we have explored document visibility as a business-to-business invoice-based issue, it is equally relevant across all industries and for all document types. Such documents include sales returns, price increase letters, and renewal notification letters.
As we have seen from consumer online forums, the non-delivery of this information could lead to customer dissatisfaction, non-payment and attrition.
The good news is that today, many businesses use Enterprise Resource Planning systems to process and manage the flow of digital information into, within and out of the organisation. This automation provides the foundation on which to build and integrate
traceable financial documents functionality throughout the supply chain.
So the next time you send a birthday present to a loved one, take a moment to think about the steps taken to ensure that this invaluable parcel is delivered on time, to the right place, and opened by the right person. And consider how this principle can
be applied to the way your organisation handles its financial documents.