38% of respondents take early payments monthly in 2021, up from 19% in 2017, according to a supplier sentiment survey conducted by Taulia, a provider of working capital technology solutions. Taulia’s global supplier sentiment survey has been conducted annually since 2017 and reflects the views of nearly 80,000 respondents over a five-year period.
There has been growing interest from suppliers in regularly receiving early payment once an invoice is approved as an alternative source of finance. In 2021, one-fifth (22%) of suppliers were interested in receiving early payment every time for every customer, compared to 15% in 2017.
The supplier’s reasons for taking early payments varied. In 2021, the main reasons for their interest in early payments were:
- Cash flow gap (49%)
- Collections/payment predictability (27%)
- Working capital needs (21%)
- Ease of use (18%)
- Reduce DSO (7%)
There is also a clear progression towards better behaviour from businesses with a welcome decrease in late payment, which fell from 45% in 2017 to 36% in 2021. The reduction in late payments signifies improvements in automation and businesses’ desire to promote their suppliers’ financial health.
Cedric Bru, CEO of Taulia, said: “The financial health of suppliers is paramount to building robust supply chains. These results speak for themselves when it comes to showing the progress being made around ensuring that suppliers get paid as they desire – early or on-time. This year has seen significant disruption to supply chains due to a wide range of external factors, but adequate financing shouldn’t be a barrier.
“By working together, those at every point along the supply chain can support the growth of their own business and that of others by offering choice, flexibility, and consistency when it comes to getting paid. We hope to see continued progress with this for every size of business and know that by providing the best technology, we can actively help to make these choices available to as many businesses as possible.”
Go to Publisher: The Fintech Times
Author: Polly Jean Harrison