Invoice fraud costs the average UK business over £295,000 a year as finance professionals struggle to keep up

New Data Examines Top Challenges for Finance Teams in 2022: Rise in Fraud, Retention of Talent, Late Payments to Suppliers and Relationship to Procurement

LONDON, October 5, 2022 /PRNewswire/ — Finance professionals estimate that more than £295,000 is lost to invoice fraud per business each year in the UK. Even more shocking is the fact that 1 in 5 (20%) finance professionals are unaware or even unable to estimate the cost of invoice fraud to their business. This lack of visibility is likely due to the messy paper trails that continue to plague the billing process.

With the increase in invoice fraud, the question arises, who in the company is responsible for preventing invoice and payment fraud? In more than half of organizations (56%), the responsibility is not shared between finance and IT.

To paint a comprehensive picture of the challenges facing finance departments, Medius, in partnership with Censuswide, recently surveyed 2,750 senior finance executives globally, including 501 finance executives in the UK.

UK finance teams face the highest churn in the world

With growing pressure on finance teams, they face the added challenge of high employee turnover and difficulties recruiting qualified staff – a particularly acute problem in the UK. Almost 20% of finance professionals in the UK leave after 7-11 months, almost 10% more than any other market surveyed. Around the world, the average seniority in finance teams is 30 months.

As companies grapple with high employee turnover, finance professionals pose a particular flight risk. In the UK, 27% say their finance department is so busy they fear their colleagues are about to leave, and 26% say they have a high turnover rate in the team. One of the issues reported by finance teams is the nature of the work: 21% believe their work is dominated by monotonous and boring tasks, and 36% of professionals believe they work with outdated payment software.

London lags the UK in finance automation with implications for payments

At a time, London lags behind the rest of the UK in financial services automation, where only 25% of respondents track and measure their automation practices. In contrast, 31% of UK finance departments track and measure automation, rising to 33% in large enterprises and 43% in the US, which leads globally in automation practices.

As a result, more than a third of finance professionals (39%) say they cannot close their books on time and paying supplier invoices remains the biggest challenge for the finance department at 39% of UK businesses. Additionally, businesses in the UK take the longest in the world to process invoices, taking 27 days, 13 days longer than Denmarkwhere on average it only takes 14 days.

Account professionals admit 51% of vendor payments are late

In the UK, account professionals agree that the majority (51%) of supplier payments are late, which is below the global average of 56%, but with significant room for improvement compared to Finland, where only 44% of supplier payments are late. At the same time, 98% of UK businesses say they want to take advantage of early payment discounts, and 79% offer early payment discounts themselves.

Deciding when to pay a supplier has a direct impact on cash flow, but can also damage supplier relationships and a company’s external reputation. To increase transparency and facilitate business decision-making, in 2017 the Department for Business, Energy and Industrial Strategy introduced new requirements for large businesses to self-report payment data providers.

Relationship troubles: 39% say it costs the company money

The report found that one of the biggest issues driving late supplier payments is the relationship between procurement and finance. A healthy relationship between procurement and finance can transform an organization, while a poor relationship can lead to missed opportunities for vendor discounts, increased errors and time spent managing payments, lack of transparency and control , and damage supplier relationships.

In the UK, 72% of respondents said they either didn’t work with procurement at all (32%) or only occasionally worked with procurement (40%). When working together, 51% of respondents in the UK say they are unhappy with the cooperation, the highest level of dissatisfaction in any market – at the other end of the scale is Denmarkwith only 4% of respondents dissatisfied with the relationship.

Jim LucierCEO of Medius, said: “Billing fraud is on the rise, while global supply chains are becoming more complex. Finance and accounting teams face many challenges in an increasingly complex business environment. They need technology to get through from automation to elimination – eliminating invoicing, fraud and wasted time on unnecessary manual tasks.As a technology provider, we still have work to do to help them solve these challenges and we we are 100% focused on that.”

Kevin PermenterResearch Director, Financial Applications at IDC, comments: “Over the past three to five years, we’ve seen finance and procurement teams playing ‘mole tricks’ as they react to global economic fluctuations and the rapid digitization of processes. It’s no surprise struggling to keep up with ever-changing customer expectations, increasing risks and vulnerabilities, and challenges caused by global supply chain issues. It’s a tough environment, even for the strongest teams.

About data

The research was conducted by Censuswide, surveying 2,750 senior and senior finance managers who make final decisions and/or hold ultimate responsibility for financial matters in organizations with more than 50 employees across the UK (501 respondents), UNITED STATES (1,004 respondents), Australia (352 respondents), Finland (126 respondents), Denmark (103 respondents), the Netherlands (306 respondents), Sweden (255 respondents) and Norway (103 respondents). The survey took place between 27.04.202210.05.2022. Censuswide respects and employs members of the Market Research Society which is based on ESOMAR principles.

About Middle Finger

Medius connects invoice capture, processing, and payment to replace the worries and questions of managing accounts payable with calm and confidence. Medius goes way beyond basic automation by using artificial intelligence to do most of the work – so invoices are confirmed, coded and paid; AP teams can go home and rest quietly; and businesses can rely on their budgets and forecasts. Visit medius.com to learn more.

For more information please contact:

Francesca CahillFight or Flight for Medius
[email protected] / +44 330 133 0985

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/medius/r/invoice-fraud-costs-the-average-uk-business–295-000–a-year-as-finance-professionals-struggle-to-ke, c3642731

SOURCE Middle finger

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