Qvalia analyzed 25.8 million purchase invoices from 100 Nordic companies and public sector organizations, with annual sales exceeding EUR 100 million, and found that 0.53 percent of all invoices were managed incorrectly
FREMONT, CA: In a new study by Qvalia, a leading Nordic expert in financial data mining and a developer of finance process automation technology, it has been revealed that invoice handling errors can lead to a continuous hidden capital loss. The companies involved in the study lost an average of EUR 133,764 every year due to avoidable mistakes in their finance processes. Qvalia analyzed 25.8 million purchase invoices from 100 Nordic companies and public sector organizations, with annual sales exceeding EUR 100 million, and found that 0.53 percent of all invoices were managed incorrectly.
"Invoice handling errors cause unnecessary capital leakage. Despite the significant amounts of resources, companies invest in assuring quality and correctness. This is money that could be used to develop the company and its competitiveness," said Henri Taipale, founder and CEO of Qvalia. Even if significant resources are spent to correct these mistakes, on average, 31 full-time working days, many errors still pass unnoticed. These errors often remain hidden throughout the finance process and amount to an average loss of EUR 0.44 per invoice. Some examples of such errors include mismanaged VAT, double payments, and overpayments caused by both software and human error.
Recovery auditing, a financial data mining process, is one of the most commonly used methods to detect and recover leaked capital. It is possible to avoid these errors with the help of improved data structures and up-to-date software. "With better control of your financial data, you'll reduce the risk of errors and capital leakage. The long-term solution for most companies is digitization, such as increased use of electronic invoices," said Taipale.
Qvalia was listed as one of the Top 10 Accounts Payable and Receivable Solution Providers in Europe for 2019, by the CFO Tech Outlook magazine. Qvalia's report analyzed 100 companies and 25,840,061 invoices, managed 0.53 false invoices and spent 31 full time working days on internal corrections. From the study, it can be understood that companies need to have a plan in place to eliminate analog invoice formats such as paper and PDFs. Companies need to incentivize their suppliers to use e-invoices and map their processes and systems. Identifying bottlenecks and centralizing the management of the supply ledger and enabling continuous monitoring and updates can also help companies in dealing with the task of preventing loss of hidden capital. “What sets us apart is our ability to bring incremental change in information flow without disrupting the existing systems,” added Taipale.
