Inefficient invoicing remains a risk for universities despite digital transformation
UK universities have digitalised their invoice systems but prevailing problems risk reputation and sustainability
Economic sustainability is high on universities’ priorities, so invoice challenges faced by finance departments can have a huge impact on their bottom line. However, according to research conducted by Quadient, universities in the UK process 50,000 invoices on average each year and risk losing £2 million a year in disputed invoices.
Quadient’s research found that almost half of all universities double-paid invoices in 2022-23, risking £140,000 per university on average. While every university in the UK has digitalised its accounts payable (AP) processes, many still face significant challenges. “It is encouraging to see that universities have digitalised invoice processing, but there is clearly still a lot of work needed to help finance teams work effectively,” says Karim Ben-Jaafar, senior vice-president of Quadient in an article published on Quadient’s website.
“The problem with just digitalising the process is that things can still fall into the cracks. Given the huge number of invoices and large sums that universities process each year, these findings are likely to be just the tip of the iceberg,” says Ben-Jaafar. “At a time of economic uncertainty and when many institutions are under pressure, these inefficient processes increase the risk of mistakes that could cripple the university’s finances.”
Quadient’s research revealed that despite digital developments, 69 per cent of universities paid an invoice late and a third had a supplier or customer dispute an invoice. This increases the risk of revenue loss, damaged relationships and poor payment terms. “Universities need a more intelligent way of dealing with invoices because the current process is inefficient,” says Ben-Jaafar.
Despite digitalisation, invoice approval processes currently require many people hours across multiple departments Quadient’s research found. It was also revealed that a single invoice takes an average of 16 working days to process, and some may take as long as 42 days. According to the research, an average of 466 people are responsible for granting approvals at each university.
“When so many people are responsible for approvals and there is no clear audit trail, it’s easy to lose sight of who has ultimate responsibility,” adds Ben-Jaafar. “This creates a messy web of invoices, which can easily lead to invoices not getting paid or being paid twice.”
Digitalisation is a good first step but insufficient on its own. Automated AP solutions such as Quadient’s AP automation software by Beanworks can help universities save time but also maintain supplier relationships and avoid processing errors and delays.
“We’ve been able to free up time from chasing for AP approvals to be able to dedicate time for additional tech developments that we’ve got going,” says Quadient AP automation software user Angela Thomas, who is deputy finance director at Liverpool Guild of Students. “We just wouldn’t have been able to do those without having that time back.”
Quadient AP by Beanworks provides a streamlined solution for finance operations. The ability to identify and resolve issues quickly saves time and resources, allowing staff to focus their attention on optimising the student experience.
Find out more about Quadient.
