Dutch companies still fail to pay their invoices within the agreed payment period. Only about half of companies report that almost all invoices (80-100%) are paid neatly on time pay.
SMEs in particular struggle with timely payment. Indeed, one in five medium-sized companies pays the majority (>50%) of their invoices too late. Large companies do better in this respect; one in ten of them pays more than half of their invoices late. This is according to independent research by DirectResearch commissioned by ICreative and Easy Systems (both part of 4CEE) among more than 400 finance and procurement professionals at Dutch companies. Compared to last year, the payment behaviour of large companies is virtually unchanged. Medium-sized companies show a slight improvement. Whereas 41% of SMEs paid almost all invoices on time last year, 47% now manage to do so.
Why do companies pay late?
As the main cause of late payment, respondents point to the internal approval process. Namely, it would take too long for an invoice to be approved, making it unfeasible to pay it on time. The survey shows that some invoices are already automatically approved through matching, but most companies still approve invoices manually. Also, many invoices are paid late because there are errors on them or it was not sent in the right way, requiring corrections. In about 15% of companies, it is a conscious decision for cash policy reasons to pay (part of) the invoices late.
Average lead time of an invoice
Given the lengthy approval processes, many corrections and manual operations, it is perhaps not entirely surprising that the average turnaround time of an incoming invoice is 14 days. So from the moment an invoice arrives, it takes another two weeks for it to be ready for payment. For 16% of large companies and 17% of medium-sized companies, it even takes more than 20 days.
About the survey
Independent research firm DirectResearch questioned a total of 438 finance and procurement professionals from medium-sized (50-500 FTE) and large (>500 FTE) companies through an online survey. They conducted the same survey in 2023. Curious about all the results? Then download the full Trend Report Digital Transformation Finance and Procurement 2024.
