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THE UK MUST ACCELERATE SUPPLY CHAIN PAYMENTS TO ENSURE VACCINE DISTRIBUTION

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Paul Christensen is CEO of fintech Previse

 

From PPE production to staffing hospitals, the NHS has overcome a myriad of challenges in 2020. The healthcare industry now faces rising Covid cases and Brexit uncertainty while its suppliers experience mounting fiscal pressure. Distributing the Covid vaccine presents the greatest logistical challenge the UK has faced this century. Paul Christensen argues that the healthcare industry and government must take decisive action to secure the whole length of the vaccine supply chain.

If Britain successfully distributes the Covid vaccine, it will constitute the greatest feat the logistics, transport, and health industry will pull off this century. Plans are in place to secure the cold supply chain the Pfizer vaccine requires. St John Ambulance is training thousands of volunteers to administer the vaccine. The first vaccines are already being rolled out to the most vulnerable. However, discussion of the vaccine has neglected one of the most crucial elements of a swift distribution: ensuring accelerated payments for suppliers. Thousands of small firms are expected to play their part in distribution of the vaccine, while having to wait and chase months to get paid.

The face of international supply chains has changed dramatically since the beginning of the pandemic. The British logistics and transport industries have adapted to changing rules, local lockdowns, and shifts across all markets, all while staring down the barrel of either an eleventh-hour Brexit deal or no deal at all.

Regardless of what happens on the first of January, the logistics and transport industries will face new restrictions, which are likely to be overloaded with bureaucracy, all while dealing with the aftershocks of the second lockdown. We are already seeing overcrowding and processing delays at ports. Distributing and administering a vaccine at a national level was never going to be an easy task, but with so many factors to consider, the government and industry needs to do everything in its power to ensure a smooth, resilient supply chain. A key aspect of this is paying suppliers quickly.

 

Accelerated payment is essential for supplier agility

Traditional finance operations can take up to 120 days to pay invoices. This long-standing culture of long payment terms reduces supplier liquidity and limits opportunities for investment and growth. One of the simplest ways to protect vaccine distribution, avoid bottlenecks and enable supplier agility is to accelerate payment of invoices throughout the whole supply chain.

The problem of slow and late payments isn’t new, even before the pandemic late payments to suppliers amounted to over £23 billion, according to Pay.UK research. The Federation of Small Businesses found that 62% of small businesses have experienced either an increase in late payments and/or had payments frozen completely as a result of COVID-19. The government and NHS cannot afford for late payments or long payment terms to plague Britain’s vaccine supply chain if they want to ensure its successful and safe roll-out to those who need the vaccine most.

 

Technology enables instant payment

Both the government and the NHS, as well as industry, can adopt Day-1 payment policies for invoices in a way that would also be sustainable long-term for their own cash flow. The technology and processes exist to enable suppliers to access cash immediately without requiring the buyers to change or speed up their payment processes.

Machine learning makes it possible for both the private and public sectors to enable early payments, and benefit. Paying suppliers faster demonstrates a real commitment to sustainability and strengthens supply chains at minimal cost to the taxpayer. Every supplier deserves the opportunity to be paid on day-1.

Patients receiving the vaccine is the final result in a long chain where each step needs to perform flawlessly to ensure the vaccine is delivered. In order to do this, suppliers at each step need to have cash available when they need it to ensure they can perform their part. To create a sustainable vaccine supply chain, we need to take on the inertia that suppliers face when trying to get invoices paid. Increasing the strength of the supply chain as a whole will have a positive impact on every participant and enable a smooth and swift distribution.

From production and transport to the healthcare workers administering the vaccine, the whole supply chain requires fast payment. Now is the time for government, hospitals and industry to work together to provide financial security to the whole supply chain and secure the vaccine’s distribution throughout the UK.

 

Paul Christensen is CEO of fintech Previse, which uses machine learning to get suppliers’ invoices paid the moment they are received.

Finance

THREE STEPS TO ENSURE RECOVERY OF COVID LOANS GOES SMOOTHLY

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In the wake of the pandemic, the government acted quickly to provide financial Covid support packages to help struggling businesses. With the economy now recovering, Mike Hampson, CEO at Bishopsgate Financial explores the range of options available for banks to ensure that those loans are repaid.

 

Since the start of the pandemic, businesses have raised over £75bn[1] from banks and financial markets, through interest-free emergency support schemes. But the harsh reality is that not all loans will be honoured as the economy recuperates.

As a result, banking professionals with client relationship management experience and skills in supporting clients to repay loans in a challenging business environment, will be in high demand.

 

Mike Hampson

Setting up training capabilities for client support post-pandemic

Commercial bankers estimate 60% of new coronavirus scheme loans[4] will default or suffer other repayment issues that will drive previously unseen levels of non-performing loans. It’s a tough balancing act and one that demands careful management of the lending transaction lifecycle, from origination through to collection, recovery, and handling bad debts. Banks no doubt already have frameworks in place to manage these elements, but it’s highly important to make customer interactions as easy as possible and ensure their genuine concern for their customers is clear.

Subsequently, hundreds of workers at major banks including HSBC, NatWest and Metro Bank[5] are understood to be receiving training in how to deal with vulnerable customers and “demonstrate empathy” as the first wave of repayments for coronavirus loans fall due. Staff ‘sensitivity[6] training builds on client-support and workout capabilities, such as improving sensitivity to early-warning systems, developing short-term forbearance solutions and loan modifications, and providing guidance on alternative products.

This approach may further avoid the additional pressure on the UK’s mental health crisis as financial institutions prepare to call in loans issued during the pandemic.

HSBC, which now has 400 staff in its debt collection team,[7] said the aim was to ensure staff had a “consistent understanding of vulnerability” and are “aware of the factors that could make an individual vulnerable” when having repayment conversations with customers.

An executive at another bank said its expanded debt collection team was being trained in “empathy, vulnerability and listening skills”. The individual told The Telegraph: “Ultimately, we don’t want to damage the economy by being overly aggressive.”

A peculiarity of a crisis situation is that customers don’t always know what they will need until that need is pressing. Finding that their bank is prepared to help in unexpected ways will go a long way toward reassuring them.

[2] https://www.law360.com/articles/1355897/

[3] https://www.bishopsgate-financial.com/insights/the-change-perspective/the-change-perspective-2021

[4] https://www.grantthornton.co.uk/insights/how-to-manage-upcoming-non-performing-loans/

[5] https://industryslice.com/NewsLetter/8_33

[6] https://www.telegraph.co.uk/global-health/climate-and-people/covid-19-has-amplified-parallel-pandemic-poor-mental-health/

[7] https://www.msn.com/en-gb/money/other/bank-staff-get-sensitivity-training-before-calling-in-covid-debts/ar-BB1fNMte

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FOUR STEPS TO INTEGRATING INTELLIGENT AUTOMATION IN THE FINANCE DEPARTMENT

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Marieke Saeij, CEO of Visma | Onguard

 

It’s clear that Intelligent Automation (IA) is still very much an emerging technology, with one indication being that is has only been mentioned a handful of times on Twitter since the beginning of 2021. Results from our latest annual FinTech Barometer reveal a mixed picture in terms of awareness, with half of finance professionals having never heard the term before. Whilst this is unsurprising for a technology concept very much in the ‘early adopters’ stage, organisations can stand to gain real benefits from embracing Intelligent Automation now, particular within the finance department. With this in mind, we explore some of these benefits and share a step-by-step best practice to implementing it into business operations.

 

Intelligent Automation ensures a predictable order-to-cash process

Such is the speed of introduction of new technologies that it’s a challenge for businesses to keep pace. As the newest innovation in finance, Intelligent Automation is one that organisations can’t afford to let pass by. It truly takes financial process automation to the next level. In addition to helping maintain a high-quality customer service, it also complements the existing skillset of finance professionals in the industry.

Marieke Saeij

While Robotic Process Automation (RPA) and Big Data are key innovations for the sector, IA can be likened to an additional layer that enhances existing technologies. By combining applications, this layer is capable of independently assessing situations and determining the appropriate process sequence. It can, for example, fully determine the risk of a specific customer, and can also predict at an early stage which invoices will be paid late, or even not at all, ensuring that finance professionals can then plan accordingly. The result is a reliable and predictable order-to-cash process.

 

The four steps to an IA-proof organisation

While the benefits of IA are numerous, implementing the technology can prove complex, although some are already treading the IA path without knowing it. In this instance it’s crucial to become aware and begin the purposeful process to full integration. Below are the four key steps to becoming fully IA-proof.

  1. Exploring the potential: Brainstorm where automation can be applied

Step one is to examine the extent to which automation can help your organisation. Blue sky thinking is the key here. What is the ideal relationship with the customer? What does the ideal order-to-cash process look like? In this phase, involving multiple departments from within the organisation is key, from management to operations. The finance professionals who have the most contact with customers are likely to have the strongest knowledge of which processes they would like to see automated. With no limits to ideas, it’s best to explore all the opportunities in the entire order-to-cash process and describe broadly the potential value to the organisation.

 

  1. Decipher which data and technology is needed

The second step is to map out which data and technology is required. Working with a specialist, either external or from the internal IT department, is beneficial at this stage to see where the opportunities lie. In many cases, off-the-shelf solutions are already readily available to help make the difference, so it pays to do the research and gain advice where possible.

 

  1. Firm up the strategy

With the plan mapped out, it’s time to fit the pieces of the puzzle together. Which technology and accompanying software is proving most valuable? It’s vital at this stage to analyse the results the organisation is achieving from deploying the right technology and software. It’s also important to outline any limitations and emphasising the potential risk of failure. This is the business case and the basis for the elevator pitch that will be presented to internal stakeholders.

 

  1. Draw up the roadmap and start benefitting from agility

The fourth and final step is prioritisation. The roadmap will describe step-by-step how to move from the undesired current situation to the desired end goal. In the first step, choosing a subproject that is relatively easy to achieve will help gain support from other departments within the business, and provide invaluable experience that can be applied to the more complex components that follow later. This agile approach facilitates a learn-by-doing mindset and allows the following steps to be tackled in a smarter and simpler way.

 

Effective preparation is half the battle

Exploring the potential of automation, mapping the required data and technology, establishing the strategy and laying out the roadmap are the four crucial steps to ensure the foundation for Intelligent Automation. Effective preparation and estimating which technology and accompanying software is needed will help to create a streamlined and error-free order-to-cash process. To ultimately save time and costs, empower finance professionals and maintain customer loyalty, the time for Intelligent Automation is now.

 

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