OB10 and IARP conducted a survey of accounts receivable professionals to gather information on the collections, invoicing and payment processes, as well as the economic outlook, from the point of view of these professionals. This is the second year that OB10 and IARP have conducted the survey.
The survey respondents — which include CEOs, presidents, owners, CFOs, and accounts receivable directors and managers from a wide variety of organizations — indicated they are submitting more invoices to their customers electronically this year compared to the previous year. These professionals also stated that more predictable payment from customers is still critical to maintaining the cash flow of their organizations.
With regard to collections, more than half of the professionals (59 percent) reported that they are calling customers more often to receive payment, similar to last year's result (55 percent). Additionally, respondents reported an average days sales outstanding (DSO) of 33.5 days — lower than the average DSO of 36.1 days reported last year.
Of the many insightful data points resulting from this survey, Peter Watson, senior vice president for OB10, singled out two key items illustrating how A/R professionals feel about invoice submission methods available to them.
"The first is that 76 percent of the respondents believe e-invoicing expedites the collections process, and the other shows that e-invoicing was the only invoice submission method growing in use year-over-year," Watson said. "I believe the number of companies transitioning to electronic invoicing will continue to rise, partly due to many A/R professionals being only somewhat satisfied with the results of their collections efforts and the vast majority being receptive to electronic methods of invoice submission."
In terms of economic outlook, the survey indicates that respondents believe the economy is showing signs of improvement. About 43 percent reported that the state of the economy negatively impacted their business, compared to 65 percent from last year's survey. When asked about prospects for this year, 83 percent of the respondents stated they expect the economy to improve in 2011, compared to only 6 percent who expect the economy to get worse.
"The results of the data confirm what we already suspected — that the economy has made noticeable strides and appears to be on its way to recovery," said Thomas M. Bohn, president and CEO for IARP. "Almost 60 percent predicted that their companies would do better financially in 2010 compared to the previous year. Now that we're able to look back and accurately assess, about the same percentage have indicated that 2010 was indeed a better year than before. This illustrates how valuable A/R professionals are in understanding the financial health of their companies."
An executive summary as well as the full report are available from the OB10 and IARP websites at here or here, respectively (registration or IARP membership required, respectively).
- Five Best Practices for Successful A/P Automation — A look at why accounts payable must be an enterprise-wide initiative
- The Evolutionary Investment in Accounts Payable Automation — By overcoming challenges in A/P automation, companies can increase accuracy, save time and money, and gain control over finances