To support the release of our Purchase Order Processing (POP) solution we have researched the UK SME industry to better understand the challenges and pain points facing financial controllers. Performed by independent research house, RedShift Research, our report addresses the fragmented approach UK SMEs have to POP.
We set out with the goal of gaining an insight into whether POP in UK SMEs was as efficient as many profess it to be – controlled expenditure, automated and seamless three-way matching, touch-free purchase invoice processing and a real-time view of committed spend across the business! Is this really being achieved by UK SMEs?
Sadly, the reality is far from this idealist view with half of finance professionals reporting that they are unhappy with their current POP and that they spend more than a full working day per month just dealing with queries associated with purchase orders.
Fragmented, broken, inefficient
When setting out on the research we did so under the assumption that most SMEs have probably got a dedicated PO process in place – be it paper, email or a software solution. What we didn’t expect is that SMEs would have a hybrid mix of all three and that employees would actively find a way around a set of PO processes if they thought it was easier and more efficient to do so!
Two-thirds said they can use emails to make a purchase request, but over half also admitted that formal paper-based forms can be used; and 30% had the option to make a verbal purchase request. From a tracking perspective, this raises the very valid question of: “How do the financial controllers keep track of what is being spent and ensure that there is enough cash in the coffers to settle any invoices?”
Poor financial tracking, high risk of PO loss and a lengthy approval process are just three themes that came out of the research, highlighting the fragmented POP within SMEs. A harsh reality is that one in three SME businesses are suffering from inefficient POP and are lacking a consistent end-to-end model.
The results of the general election have steadied the stock market and UK SMEs feel slightly more optimistic about the future. This is not to say that we all still face a hard road ahead where efficiency, cost savings and business growth remain top of the corporate agenda. Which is why, to us, it makes sense that UK SMEs should be looking to streamline existing processes so that productivity is increased instead of restricted. Why wouldn’t C-level executives want to alleviate the pressures on finance workers and ensure their time is spent more effectively i.e. looking after the money?
You can download the full POP report by clicking here and gain access to the full results and our analysis of how this fragmented approach is impacting UK SMEs.