For CFOs managing large enterprises in Australia, meeting supplier payment terms is a growing challenge. eInvoicing offers an innovative way to reduce the number of days it takes to process payments, addressing compliance issues and boosting cash flow efficiency.
Late payments are a common headache for many large enterprises, particularly in industries with complex supply chains or high volumes of transactions. According to the Payment Times Reporting Register, while 69% of invoices are paid within 30 days, a concerning 23.9% take between 31-60 days, and 7.1% stretch beyond 60 days. This inefficiency can mean both reputational risks and operational bottlenecks.
Why Payment Delays Matter
Payment delays are more than an inconvenience — they create serious cash flow challenges for suppliers, hinder business agility, and weaken trust within the supply chain. The pressure to shorten payment cycles is not just an internal priority; it’s a public matter, with payment terms now publicly reported through the Payment Times Reporting Register.
Companies with poor payment practices risk being highlighted, which can affect not only their supply chain relationships but also their financial standing with businesses and investors. In addition, extended payment times can make it harder to attract new suppliers who are wary of engaging with businesses that are slow to pay.
How eInvoicing Shortens Payment Cycles
One of the biggest obstacles to faster payment cycles is the time-consuming nature of traditional invoicing methods. Manual invoicing, whether paper-based or emailed, introduces multiple points where delays can occur. Human error, invoice disputes, or lost invoices all contribute to longer payment times. eInvoicing, on the other hand, automates these processes, ensuring that invoices are delivered directly to the cloud accounting system and ERP system
Here are several ways eInvoicing helps CFOs break through the 30-day barrier:
- Reduced Processing Time: With traditional invoicing methods, invoices can sit in email inboxes for days, even weeks. eInvoicing eliminates this delay by delivering invoices directly to the recipient’s accounting software. This not only accelerates the invoicing process but also reduces the chances of invoices being overlooked or delayed in the system.
- Fewer Disputes: One common cause of payment delays is disputes over invoice details. eInvoicing allows for upfront data validation, ensuring that invoices contain the correct information before they are sent. This reduces the likelihood of rejected invoices, disputed payments, and the need for back-and-forth communication between finance teams and suppliers.
- Immediate Acknowledgement and Processing: eInvoicing enables real-time tracking of invoice submissions, giving CFOs greater visibility into the payment process. This transparency ensures that finance teams can quickly identify and address any delays, helping to streamline payment approvals and reduce overall cycle times.
Improving Cash Flow and Supplier Relationships
For CFOs, cash flow management is a top priority. Delayed payments disrupt cash flow and create financial strain on both sides of the supply chain. With eInvoicing, companies can improve liquidity by ensuring that payments are processed faster and more predictably.
Suppliers also benefit from faster payments, which enhances supplier relationships and builds trust within the supply chain. Maintaining a strong supplier network is critical, and payment performance plays a key role in ensuring suppliers remain satisfied.
Building a Resilient Financial Future with eInvoicing
eInvoicing offers an enhancing tool to improve payment performance. By adopting eInvoicing, companies can achieve greater efficiency and accuracy in their invoicing processes, which directly impacts payment speed. Faster, more predictable payments help businesses position themselves as reliable partners in the supply chain.
The transparency and automation offered by eInvoicing allow CFOs to take a proactive approach in reducing payment delays, improving their organisation’s standing in the eyes of both suppliers and stakeholders. In a market where payment practices are increasingly scrutinised, businesses that embrace eInvoicing demonstrate leadership and a commitment of financial prudence.
Find out how you can benefit from using eInvoicing by booking a discussion with us now: https://link4.co/
Footnote: In this article, “eInvoicing” and “e-invoicing” are used interchangeably to refer to electronic invoicing.