About the article in Les Echos: Payment delays: Bercy puts pressure on companies - Guillaume de Calignon
In the era of "cash is king", optimizing liquidity is becoming the key to the war French companies are waging against Covid19. From one end of the economic spectrum to the other, companies are bound by the same obsession: large companies adopt a prudential management of their cash, while smaller companies make sure to bring in cash as quickly as possible. These two seemingly irreconcilable objectives must converge in an optimized cash management.
Late payments to suppliers: innovation must move the lines
The subject of late payments, an endemic problem in the French economy, is an excellent example. Critical accounting processes, which are the lifeblood of companies, are still not very digitalized. The challenge of optimizing them is largely technological. The current situation is, in large part, due to the archaic nature of the solutions in place. The recent breakthroughs of the latest generation of solutions will allow us to treat the subject better for a fraction of the cost and, above all, to restore confidence between participants. The current crisis will act as a formidable catalyst for technological progress.
Late payments in France remain high (see the latest study from the Payment Observatory). The largest French companies (SBF 120 and CAC40) are the worst performers in the class, as this publication also indicates. A complementary study by the IDC, indicates that "accounting departments spend 30% of their time manually entering supplier invoices". The dematerialization of invoices represents a saving of 50 to 75% compared to paper processing, and reduces processing time by about 30%.
In the same study, it was found that companies also spend a quarter of their time entering information into Excel to fill in the gaps between the software bricks involved in this supplier payment process. This creates irritants and workload breaks for all participants. The accountants of large groups who suffer from their lack of equipment, their internal customers who are unable to inform their suppliers about the status of their payment and the suppliers who are embroiled in a process that is often complicated by IT constraints (obligation to refer to internal numbering which slows down the payment for example). And in this context, the regulator notes the failures and sanctions.
The COVID19 crisis has added remote access constraints for employees who use software packages invented in the 20th century. And it is clear that these were not designed to be used from a private home. They require a massive investment of unforeseen IT resources. This crisis has also amplified the already noticeable trend of stopping multi-year IT projects. In 2020, shorter, more agile projects that deliver tangible results in a few weeks are the new norm.
From an even more strategic point of view, the "cash culture" has become a central concern for managers (EBIT having taken a back seat). This culture implies that all the company's employees, from the financial director (who is responsible for keeping the accounts), to the order issuers and the people in charge of invoicing, participate easily in the process. Finance becomes a collective sport and innovation finally allows to put it into action simply.
Widespread adoption of innovative technologies always takes time. More, in fact, than was originally anticipated when they were created. But the changes they enable are also more profound than originally imagined. For example, the security of remote work is greatly enhanced by the Blockchain and the Cloud. These two technologies provide secure, tamper-proof solutions that are very easy to use. The resurgence of informal exchanges (emails, office files...) between remote workers makes it imperative to have a strong traceabilit in order to re-establish confidence in the data exchanged. Implementing in a few months a solution that will change a decade old state of affairs. Until now, it was technically impossible to offer an ultra-simple audit trail designed for non-IT specialists. Now this is a reality.