Late payments are a headache for suppliers, but the stats that surfaced this week suggest that the cost benefits of delaying payments are too good to pass up for corporate buyers — that or buyers themselves are struggling to pay their bills on time even if they wanted to.
Plus, new research uncovers just how vulnerable employee information is to corporate hackers, why businesses aren’t interested in moving on from checks and how millennial procurement officials are tapping into Facebook to source for their firms. All the data gets broken down below.
$590 billion in unpaid invoices are plaguing Chinese businesses, according to new reports from Bloomberg. The late payment problem in the country hasn’t been this bad since 1999, analysts added, with businesses waiting an average of 83 days to see their invoices paid off. “The raft of unpaid bills … shows how cash shortages at the weakest firms threaten not only banks and bondholders but also China’s vast web of interconnected supply chains,” the report stated. Corporate debt levels are at an all-time high, as are nonperforming loan levels; coupled with the economic slowdown, analysts said there is a knock-on effect within the market that leads to late payments.
$50 million in benefits resulted from delayed supplier payments by the world’s largest dairy exporter, according to reports last week. Fonterra Cooperative Group confirmed that it had extended payment terms with 1,000 New Zealand suppliers by three months. Reports said that’s on top of the estimated 15 percent of its 20,000 suppliers across the globe that had been impacted by the extended payment terms. While Fonterra Chairman John Wilson said that the policy should have been communicated to its partners more clearly, the company does not plan on changing payment terms.
9.9 million digital files can be accessed by an employer on any employee, regardless of that employee’s role in the company, found new analysis from Varonis. Researchers revealed that this trove of information businesses have on their employees is less than secure, with 28 percent (1.1 million, to be exact) of all folders with the “everyone” permission enabled could be accessed by anyone on the corporate network. According to reports, this makes the data particularly vulnerable to hackers. Further, 70 percent of the data accessible to these businesses hadn’t been accessed in six months, while nearly one-third of the 25,000 user accounts assessed had been stagnant for the last 60 days — a finding that researchers said suggests that the files were on former employees. Varonis even found one company with more than 2 million files with sensitive information (credit card, Social Security and account numbers) accessible to anyone on the company network.
51 percent of firms aren’t actively reducing their paper check volumes, declared the latest research from AP Now. The 2016 Payment Survey found that U.S. businesses that already handle lower volumes of checks are the ones most aggressively weaning themselves off the manual payment process. Overall, however, 75 percent of payments made by businesses surveyed are done by check, and just 45 percent of the heaviest check users are interested in reducing their use of the payment method. In a statement, AP Now survey sponsor Mary Schaeffer described the findings as “unfortunate.”
One-third of businesses have a millennial in charge of purchasing, and that means major shifts in the way corporations are sourcing for their procurement needs. According to a survey published last week by Sacunas, the younger the decision-maker, the more likely they are to turn to digital channels to research and source products and services. That includes search engines, supplier websites and social media, researchers found. For those procurement professionals ages 20–24, 19 percent said social media is their most important resource for researching a new solution for their business; 85 percent of millennials reported using social media in their research process, with the most common platform being Facebook. Mobile devices were also cited as key to the sourcing and procurement process by millennials, research found.
One in nine B2B invoices are paid on time, according to SME accounting firm Xero. That’s not exactly impressive. The statistic was released by the firm’s New Zealand managing director, Anna Curzon, as the company responded to Fonterra’s extension of supplier payment terms. According to Curzon, the volume of invoices more than one month past-due increased to 40 percent, from 24 percent last year.