News & Views
Early payment rises, says Taulia
Nearly 40% of businesses say they are using early payment to manage their working capital according to the latest survey from Taulia (www.taulia.com).
Exploring five years of data from nearly 80,000 respondents, early payment is now cited as a key working capital tool with its usage growing by 19% since 2017.
There has been growing interest from suppliers in regularly receiving early payment once an invoice is approved as an alternative source of finance. In 2021, one-fifth (22%) of suppliers were interested in receiving early payment every time for every customer, compared to 15% in 2017.
Reasons for taking early payments included: to fill the Cash flow gap (49%); greater payment and collections predictability (27%); Working capital needs (21%); Ease of use (18%); and the opportunity to reduce DSO (7%).
There is also a clear progression towards better behaviour from businesses with a welcome decrease in late payment, which fell from 45% in 2017 to 36% in 2021. The reduction in late payments signifies improvements in automation and businesses’ desire to promote their suppliers’ financial health.
“The financial health of suppliers is paramount to building robust supply chains. These results speak for themselves when it comes to showing the progress being made around ensuring that suppliers get paid as they desire – early or on-time,” comments Cedric Bru, CEO, Taulia. “This year has seen significant disruption to supply chains due to a wide range of external factors, but adequate financing shouldn’t be a barrier. By working together, those at every point along the supply chain can support the growth of their own business and that of others by offering choice, flexibility, and consistency when it comes to getting paid. We hope to see continued progress with this for every size of business and know that by providing the best technology, we can actively help to make these choices available to as many businesses as possible.”
The full report can be found at https://taulia.com/resources/reports/supplier-survey-5-year-review/