Online accounting helps SMEs get paid faster

 

Online accounting
Photo Credit: Ѕolo via Compfight cc

Online accounting and invoicing is helping many SMEs to get paid faster than was the case two and a half years ago, according to accountancy software provider Xero.

 

 

In late 2011, the e-accountancy platform saw invoices paid an average of 48 days after the date on which they were issued – so 18 days overdue on accounts subject to 30-day payment terms.

 

But in the most recent data, published in late May, there has been a 15-day improvement, and the average invoice is now cleared in 33 days.

 

Significantly, the same companies, using the same payment terms, were included in both sets of data – so it is not simply that Xero’s user base now contains more 30-day accounts.

 

Xero’s Grant Anderson explained: “The data is based on the period of time from invoice date to payment date, so it is [total] days to get paid.

 

“Xero looked at the same businesses over the whole period to eliminate any skew from adding in new businesses that may have different payment terms.”

 

In a blog post discussing the report, Xero advise several measures to help drive down payment delays even further:

 

  • Invoice immediately upon completion of a job.
  • Use online invoicing to avoid delays caused by sending out paper invoices.
  • Track overdue invoices and chase them promptly.
  • Use experts to spot and fix procedural bottlenecks.

 

“We’re not satisfied with 33 days – and you shouldn’t be either,” Mr Anderson wrote on the Xero blog, and where there is the potential to drive even faster payments, we would be inclined to agree.

One thought on “Online accounting helps SMEs get paid faster”

Leave a Reply

Your email address will not be published. Required fields are marked *

REQUEST A FREE CALLBACK