André von de Finn, Senior Account Manager, Basware GmbH, comments on a recent study into the payment behaviour of German companies published by EOS Deutschland, a company specialising in managing debtor risk, and by the credit bureau Bürgel:
"There are many reasons why invoices remain unpaid: the economic situation, sloppiness or pure malice – the latter is often labelled “payment behaviour” or “payment morality”. The fact is, fewer and fewer invoices are paid on time.
A recent study collating data from 463,000 companies shows: The payment behaviour of German companies has deteriorated in Spring 2013. In March 2013, the number of companies who were late paying their invoices rose to a 12-month high of 18.8%. The study into the “Payment Behaviour of German Companies” (“Zahlungsmoral deutscher Unternehmen”) published by EOS Deutschland and Bürgel blames this development primarily on the faltering economic growth in Germany.
But there is another explanation – hiccups in the processing of invoices. Empirical evidence shows: Invoices frequently remain unpaid for too long by pure accident. Incomplete or incorrect invoices can cause enormous delays because hard-copy documents have to be sent back and forth for review by various finance and business departments involved in the approval of invoices for payment. International correspondence also creates confusion and complexity.
Many companies and industries still have a long way to go in order to optimise their payment processes. Supplier and customer networks require shared platforms for collaboration on which to implement seamless invoice processing. Early-warning systems have to be put in place in order to minimise delays.
Automotive manufacturers are showing the way: Many companies in this sector started implementing appropriate systems and processes years ago, enabling them to get their suppliers, many of them SMEs, on board and improve cooperation with them."
Read Bürgel’s original release here »