Europe-wide standardized payment processes would lead to cost savings of up to 20% for companies
Munich, July 31, 2012
- A new Roland Berger study shows: Standardized payment processes could help European companies in the consumer goods industry become more cost efficient
- 77% of the companies surveyed would like to have standardized payment processes across borders
- Standardization has many benefits – from cost efficiency to higher liquidity and improved process quality
- Companies see the biggest benefit in the additional working capital they would have at their disposal
The processing of orders and payments is still very complex and only standardized to a small degree at European consumer goods companies. Not only local legal and fiscal requirements complicate payment processes in Europe, heavily fragmented data systems also cause significant disadvantages and unnecessary costs. Internationally standardized payments could lower the process costs by up to 20% and greatly reduce the amount of errors. Early and well-coordinated payments also improve the liquidity situation and working capital of companies. These are the most important findings of Roland Berger Strategy Consultants' study entitled "European payment processes – Improving efficiency and lowering costs".
"Slow payment flows and high costs of document and complaint management have a detrimental effect on the liquidity and working capital of many companies," explains Regina Schmidt, Partner at Roland Berger Strategy Consultants. "There is enormous potential for savings here, because standardized payment processes and cross-border data systems can help businesses process their orders, delivery notes and invoices more efficiently."
Complexity hurts liquidity
The bigger the company, the more complex its transaction and accounting processes. Because of the many customers and suppliers and ever-changing regulations, it is becoming more and more expensive to process orders, delivery notes and invoices. 50% of the survey participants process these documents electronically already, but local legal and tax regulations make the overall process more difficult at European level. For example, 92% of the respondents use electronic data interchange systems when processing their payments, but less than 20% of them use them for international transactions.
Then there are delays in incoming payments, for example when invoices cannot be paid because wrong order volumes are delivered or prices are incorrect. "Although nearly all companies have several people employed in internal accounting, heavily fragmented product and customer data at their individual local units negatively impacts their payment efficiency," Roland Berger expert Andreas Bonnard explains.
A European solution is needed
77% of the companies surveyed would like to see international payment standards. They see the greatest potential for improvement in the payment process itself (50%), followed by the complaint (33%) and delivery processes (25%). "A standardized European solution would simplify the processes at companies and require fewer staff," says Regina Schmidt. "One conceivable solution would be a centralized European regulatory instance that not only mediates between varying local laws and regulations, but also acts as an interface between industry and trade, ensuring smooth payment processes all around Europe."
But it is precisely in these local regulations that the difficulties lie for such a centralized institution. As Andreas Bonnard says, the internal structures within the companies are also a problem: "Companies have payment processes that have developed and grown over time, their own IT systems and fields of responsibility that cannot be changed from one day to the next. But the benefits of international payment processes are clear to see, and they will win over time."
More press releases
- up ↑
- Roland Berger-Studie zeigt: Vernetzte Automobile eröffnen Herstellern und Zulieferern neue Perspektiven, Aug 2012
- European banks need to offer suitable small and mid-size enterprise financing in order to grow and take advantage of the business opportunities, Aug 2012
- Europe-wide standardized payment processes, Jul 2012
- New Roland Berger study on rare earths, Jul 2012
- European banks could save EUR 40 billion through a new wave of cost cuts, Jul 2012
- down ↓