As part of the latest edition of the Sage Download, we examine the ways in which technology can help businesses manage cash flow, speed up payments and provide a platform for growth. For example, the global transition to e-invoicing is expected to be a game-changer for companies of all sizes, while software like Sage’s Futrli can help companies address late-payment issues and fine-tune their financial forecasts.
Efficient and effective cash flow management is one of the most important parts of running any business, and technology has a vital role to play in reducing the impact of late payments, speeding up cash flow and boosting productivity.
By Chris Torney
Late payments can stall growth and put small businesses at risk. But with the right technology, SMBs can spot risks early, streamline their processes, and take control of their cash flow before problems escalate.
A powerful solution is e-invoicing — a system that governments around the world are encouraging firms of all sizes to sign up to, that goes beyond replacing paper invoices or PDFs. E-invoicing enables a standardised, automated exchange of payment data directly between accounting systems, making the process faster, more accurate, and far less manual.
Sarah-Jayne Martin, director of financial automation at business process specialist Quadient, explains: “E-invoicing is a step further on from electronically delivered PDF invoices, for example. It involves taking the data from those invoices in a specific, structured format, and then delivering it in an efficient and streamlined way.”
At the same time, services like Sage’s Futrli (see below) help businesses to analyse historical data to identify potential cash-flow pinch points and highlight customers that may be persistent late payers. Futrli can also improve the accuracy of forecasts, helping SMBs plan for the future with confidence.
The business benefits of e-invoicing
The advantages of the widespread adoption of e-invoicing are expected to be significant, Martin adds. “We will see improved efficiency around how invoices are processed, so this should remove manual errors or problems associated with incorrect data being sent.”
There are also cost and productivity savings, as finance teams will no longer need to take such a hands-on approach to creating and delivering invoices. “Additionally, businesses can expect to see an improvement in cash flow as e-invoicing will speed up the process of delivering an invoice and receiving a return payment,” Martin says.
Indeed, research from Sage suggests that, among businesses that have already adopted e-invoicing, the incidence of late payments has fallen by an average of 20%, while overall invoice-processing time has been cut in half. Depending on a company’s size, the potential savings from making the shift to e-invoicing could be worth the equivalent of tens of thousands of pounds a year, significantly outweighing the cost of the initial investment in e-invoicing software.
Max Whiteley, product domain expert at bookkeeping automation specialist Dext, adds: “E-invoicing also has the potential to provide SMBs with business-facilitation and tax-reporting benefits – making the overall process much easier for early-stage businesses. On top of that, the digital processing of e-invoicing could potentially reduce firms’ carbon footprint compared to traditional alternatives such as paper formats.”
Why governments are leading the e-invoicing drive
At present, the take-up of e-invoicing around the world varies considerably from country to country. Governments in Europe, Latin America and parts of Asia are leading the way in terms of mandating the use of e-invoicing: while the technology has significant benefits in terms of productivity and growth, as set out above, e-invoicing also provides authorities with more insight into tax data, better traceability and another tool in the battle against fraud.
In Italy, for example, e-invoicing has been compulsory since 2019 and the country has seen an increase in annual tax revenues estimated in the region of €6 billion as a result. E-invoicing can also provide governments with granular and near real-time insights into trade and economic activity, helping them to develop and target economic policies more precisely.
“A number of European Union countries have taken steps to mandate e-invoicing across their economies, while the UK is at an earlier stage of exploring the concept,” explains Martin. In Britain, companies that deal with public-sector organisations such as the NHS are already required to use e-invoicing; in February 2025 the UK government launched a consultation that will look at how e-invoicing should be rolled out in the years ahead.
In the US, adoption of e-invoicing lags behind the rest of the world, according to Martin, although authorities in America have been working together with their counterparts in the EU on setting common standards. “In my experience, the US is not always keen to adopt processes that are mandated in other parts of the world – and I would note that this is a country that still widely processes paper cheques,” she says. However, companies in the US – and elsewhere in the world – are more likely to adopt e-invoicing if they are engaged in cross-border trade with customers that have already implemented the technology. Martin adds: “In the US, for example, we’ve seen much greater use of e-invoicing by companies in Brazil and Europe, which means this is starting to bubble up as an issue for American businesses.”
How Futrli can transform cash flows forecasts and manage late payments
When it comes to managing cash flow and addressing problems around late payments, e-invoicing is one solution. Sage’s Futrli is a data-driven forecasting service that can anticipate and head off cash flow issues before they can threaten the health of the business.
“Futrli was devised as a way of levelling up the playing field for small businesses,” explains Helen Cockle, senior sales director at Sage. “Big data and data analysis has always been a core driver for larger businesses – but before the cloud, small firms simply were not able to benefit from this level of insight – all the information was locked away in spreadsheets, and analysing it was an incredibly laborious process. But the cloud meant that we could connect to data and surface insights at pace, and at an affordable rate.”
Futrli connects to bookkeeping software and uses data from the company’s profit and loss account, its balance sheet and its cash flow information to immediately generate a three-year cash-flow forecast. “This allows accountants and advisers to have some really productive conversations with their clients: suddenly, firms can see what their business looks like next month, next year or two years down the line,” Cockle says.
“This analysis highlights areas of risk and potential opportunities. Most small businesses don’t have a forecast – they just use a budget that they set perhaps six, nine or 12 months ago, which doesn’t get aligned to how they are actually performing.”
From an accountant or advisor’s perspective, services like Futrli do much of the heavy lifting in terms of data creation, Cockle adds. “This frees up advisors’ time to support businesses with understanding the data and discussing the best way forward. We liken it to climbing Everest: what Futrli does is get you to base camp quickly and easily. Then it’s up to the advisor to work with the client on the final ascent.”
