Ivalua Tour: Stephen Carter, Ivalua

Late payments have long plagued small businesses, but the landscape is about to shift dramatically. With the introduction of the UK's landmark Commercial Payments Bill, organisations will face strict legal enforcement and penalties for delayed invoices for the first time.

Stephen Carter, Director of Product Marketing at Ivalua, spoke on what the new legislative framework means for buyers and suppliers alike. We also explore why simply shifting to digital invoicing won't solve payment disputes on its own, and how companies can leverage automated procurement data and autonomous accounts payable to stay ahead of the regulatory curve

Before we dive into what the Commercial Payments Bill is going to mean for businesses, could you give us the overview of what this bill is set to do?

The bill is something of a culmination of a number of steps that the UK government and wider stakeholders have gone through. Late payments have long been talked about, there have been late payment fines and so forth, but there has never been a legislative framework.

It has always been difficult for a supplier to take their customer to court for late payment.

This bill is going to impose a legal framework that effectively says, ‘I haven't been paid; I now have legal recourse against my customer.’ So I'm not going to break a relationship over it, because it's rather like a speeding ticket, I can now impose that penalty.

I think one of the important aspects of that is it means companies on both sides of the buying process, the supplier and the buyer, now have a tighter relationship with the law, rather than there being pretty much a freedom and flexibility around being paid late. Ultimately, that is the aim.

And I think that's a really important step. Once it becomes law, I think it will help, or should help, cash flow into our smaller businesses and unlock cash in the economy.

How do companies get a head start on this now, so that when it is in place, they are not scrambling and not paying penalties because of practices from the past?"

There are a number of lessons we can draw from other regions and other countries, and I'll come back to the e-invoicing picture here. E-invoicing hasn't removed disputes or enquiries.

And in fact, if you don't have a good digital foundation for your data, so you don't have good procurement data and access for the finance team to get hold of that data, orders, contracts, and so forth, then your disputes aren't going to decline; they're going to increase, because invoices arrive instantly and you're going to have to start notifying.

The same applies to payment. You need to really look at how you get your operations in order to make sure you've got the data there, and you have tools that can then use trigger points, like the invoice, to quickly match.

We're talking about AI here and autonomous capabilities, and that's one of the things that Ivalua and other vendors are doing. We're looking at autonomous AP, which takes the invoice and automatically does all the coding and all the matching, so it literally arrives in the procurement team or in the finance team within seconds.

Companies need to get ahead of the curve by ensuring they update their systems, that they've got good data, and that they've got good processes, source-to-pay solutions and other things they may need. But they need to start looking at it now, otherwise it happens and they get swamped.