Facts About Friction
The average U.S. business loses $171,340 per year through clunky payment practices causing friction in their supply chain, according to new research by Tungsten Network. This equates to almost 6,500 man hours spent chasing purchase order numbers, processing paper invoices, and responding to supplier inquiries.
Businesses estimate they spend an average of 55 hours per week on manual, paper-based processes and checks; 39 hours chasing invoice exceptions, discrepancies, and errors; and 23 hours responding to supplier inquiries, according to Tungsten Network's Friction Index report.
They also spend five hours on compliance-related tasks such as handling international taxes and three hours tackling invoice fraud, according to the report.
Understandably, given the wasted money and manpower, 36 percent of businesses responding to the survey state that removing friction from the payment process is a top priority for 2017. However, a full 20 percent of respondents state it is not a priority at all—perhaps an indication that the scale and cost of the problem is largely unseen.
"If businesses aren't tied up chasing invoices, they have more time to explore opportunities for growth," says Rick Hurwitz, CEO of Tungsten Network. "If all the data from past invoices is easily accessible, opportunities to identify variances that will target inefficiencies are more visible.
"The technology exists to remove this supply chain friction," he adds. "We challenge U.S. businesses to embrace digitization and enjoy the benefits of a frictionless back office."