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New global research involving 9,000 SMEs by Sage, a leader in accounting, financial, HR, and payroll technology, reveals that UK firms could see a 3% increase in productivity and a 40% reduction in invoicing time through the adoption of e-invoicing. Sage calls on the government to support this move, highlighting that simplifying business processes and reducing red tape could improve UK productivity and growth.
Sage’s report, “E-Invoicing: Paving the Way to a Connected, Real-Time Economy,” details the advantages of e-invoicing, where businesses electronically exchange invoices, speeding up processing, reducing errors, and eliminating paper use.
The study highlights a significant issue in the UK where 37% of SME invoices are paid late, mainly due to poor information flow, compared to a 31% average in Europe. Addressing this could support the UK economy by £2.5 billion annually.
Additionally, half of UK SME owners and managing directors often deal directly with invoice and payment issues, impacting their efficiency. Redirecting efforts from chasing payments personally, they could increase UK labour productivity by 3%.
European companies that have switched to e-invoicing report a 44% faster processing time, translating into significant savings. For the UK’s smallest companies, this could mean saving £11,300 per year each.
Despite these benefits, the UK lags in e-invoicing adoption, with only 3% of businesses using it, placing SMEs, which make up 99% of the business landscape, at a competitive disadvantage.
Derk Bleeker, chief commercial officer of Sage said: “The next government must not let UK SMEs lose out to their international competitors. Laying the groundwork for e-invoicing will be crucial for enhancing overall economic productivity and bolstering our digital economy.
“Our analysis shows that SMEs would then spend less time chasing late payments, enabling them to improve their productivity and focus on growing their businesses.”
Jonathan Crawford, business development manager, Scanmatix said: “In a world of political and economic uncertainty, one thing that’s certain is that our startup business will always benefit from improved cashflow. We spend too much time re-entering data into invoice fields and chasing payments.
“Enhancing the efficiency of this process and transferring the time saved into other tasks will help our small team be more productive. The UK needs to grasp the opportunities I’m seeing competitors and software companies in other countries take advantage of and introduce e-invoicing.”
E-Invoicing is already integrated within the Sage Network, ensuring that SMEs can meet the EU’s digital reporting requirements effectively. Sage continues to support governments and businesses in transitioning towards a more digital, efficient, and competitive future.
