Purchasing processes within UK businesses are getting worse and driving down productivity, according to a new study, with the number of finance decision makers bemoaning their business’ broken processes increasing from 54% in 2018 to 59% today.
In the last four years the number of finance bosses complaining that their company is making it too difficult to make purchases on behalf of the business has risen from 36%.
The number of finance decision makers (senior finance managers, controllers and chief financial officers) who claim their purchasing processes need to be fixed “as a matter of priority” now stands at 17% according to the survey of 200 bosses.
The independent study was commissioned by automated accounts payable and document management software specialist, Invu.
Invu’s report, which compared opinions of finance bosses now compared to similar research carried out in 2018, found that just 40% of respondents believe their company’s purchase processes are “simple” and “easy to use”.
Despite the complaints, a small number (4%) said their company was aware of the issues but had rejected plans to invest in improvements.
This lack of efficiency and productivity within finance functions mirrors the UK’s overall productivity crisis in the workforce.
Since 2009, UK plc’s productivity has all but stagnated according to figures from the Office for National Statistics and in 2019, productivity fell at the fastest pace for the past five years.
As well as subjecting finance teams to difficult, inefficiency purchasing processes, Invu’s report uncovered a significant number of businesses are shunning automated technology and are still relying on manual, paper-based processes.
Nearly four in 10 finance decision makers in the survey (38%) said their company still relied on manual processes to carry out basic tasks, although this is slightly down from the 41% who said the same in 2018.
However, large companies appear to be making bigger strides to leave paper behind with the number of big businesses still using manual and paper-based processes falling in this most recent report to 34%, from 42% in 2018.
Ian Smith, general manager and finance director at Invu, said: “The UK is suffering from a critical lack of productivity overall in the workplace, and lumbering critical functions like finance with cumbersome and difficult processes isn’t going to solve the problem. While the number of purchasing processes in need of urgent fixing has fallen in the last two years the overall number of processes causing problems is on the rise.
“Purchasing processes are a business-critical function and the consistent collapse of large companies last year shows the problems you can get into without robust, transparent processes. Too many businesses are walking a tightrope over a pit of failure right now and they need to take note quickly.”
Smith added: “Businesses deal with hundreds of documents every day, either internally with purchase orders or externally from suppliers’ invoices and trying to manage all this manually is impossible if you want to remain efficient. Even introducing some basic automation into processes can be enough to remove much of the friction in these processes.
“You also have to consider the compliance side of relying entirely on paper and manual processes. With GDPR in full effect, how confident can businesses be that they won’t fall foul of these data protection laws when they can’t keep track of the information coming in and moving through their company.”