Invoice finance has long been a vital lifeline for businesses seeking to improve cash flow and unlock working capital tied up in unpaid invoices. Yet despite its clear benefits, the industry faces a crucial moment of transformation. To thrive in today’s digital-first business environment, invoice finance providers must embrace data-driven technology that delivers the speed, convenience, and insights that modern businesses demand.
What’s Inside
- Discover why 9,000 fewer businesses are using invoice finance and how real-time accounting data can reverse this trend
- Learn how open-accounting is transforming the client experience while reducing operational costs by up to 52%
- Explore practical steps to implement data-driven invoice finance solutions that deliver 6x ROI
The Invoice Finance Challenge: Declining Numbers in a Digital Age
The invoice finance sector faces a concerning trend: 9,000 fewer businesses are using these services compared to a decade ago. This decline isn’t happening in a vacuum. Today’s businesses expect the same level of convenience and speed from financial services that they experience with consumer digital platforms.
The research tells a compelling story about why businesses are looking elsewhere:
- 81% of businesses find traditional lending application processes “excessively complex and time-consuming” (Ernst & Young, 2024)
- 67% of businesses abandon loan applications due to lengthy decision times with traditional asset-based lenders (Oxford Business Group)
Let’s be honest – in today’s world, businesses expect financial services to work as smoothly as ordering an Uber or shopping on Amazon. The days of paper-based processes and week-long waits for decisions are quickly becoming unacceptable.
Ready to transform your invoice finance operations? Contact Validis today to learn how real-time accounting data can revolutionize your client experience.
The Tech is Already Here: What’s Holding Lenders Back?
Here’s the truth – the technology to transform invoice finance isn’t some futuristic concept. It exists today. Data-driven technology that enables open-accounting and standardizes financial information is already being implemented by forward-thinking lenders. So what’s holding others back?
Much of the hesitation comes from concerns about implementation complexity, client adoption, and the perceived value of existing processes. But let’s look at the facts:
- Leading banks have achieved >90% client adoption with the right implementation approach
- Implementation can be completed in as little as two weeks with minimal disruption
- The ROI is clear and measurable – 6x return according to Barclays’ experience
The question isn’t whether to implement data-driven technology, but how quickly you can get started.
Open-Accounting: The Foundation for Modern Invoice Finance
At the heart of this evolution is open-accounting – the secure, permission-based access to real-time financial data directly from a client’s accounting system. This approach eliminates the administrative burden that has traditionally plagued invoice finance:
From Document Collection to Direct Data Access
Traditional invoice finance relies on clients manually preparing and submitting financial documentation. This process typically consumes 15+ hours of client time per application (Forrester Research, 2023) and costs lenders between $11,000-$16,000 per commercial loan application in processing expenses (KPMG, 2024).
Open-accounting transforms this experience by enabling clients to securely share standardized financial data in under 60 seconds. This isn’t just incremental improvement – it’s a fundamental reimagining of the client journey.
From Monthly Reconciliation Burden to Automated Monitoring
Invoice finance providers allocate 31% of operational costs to data management processes that could be automated (FCA). The ongoing reconciliation process creates significant friction, with 58% of businesses considering these reporting requirements “burdensome” or “extremely burdensome” (Association of Finance Professionals).
With standardized, real-time accounting data and data-driven technology, both clients and lenders win.
Businesses save up to 85% on administration, while lenders benefit from a 50% saving on monthly reconciliation costs or remove the need for reconciliation altogether.
See how Validis can streamline your invoice finance operations. Book a demo today and discover the power of real-time accounting data.
Client-Centricity: Transforming the Customer Experience
Let’s face it – traditional invoice finance processes weren’t designed with the client experience in mind. They were built around the lender’s operational needs and risk management requirements. But in today’s competitive environment, client experience is everything.
Research by BVA-BDRC highlights key perception barriers including “overly bureaucratic processes” and “speed of onboarding” that directly impact client adoption.
Data-driven open-accounting transforms the client journey from a paper-heavy administrative burden to a seamless digital experience. Imagine telling your prospects:
- “Just connect your accounting system and we’ll handle the rest”
- “No more monthly data prep – we’ll get what we need automatically”
- “Decisions in days, not weeks”
This client-centric approach doesn’t just reduce friction; it fundamentally changes how businesses perceive invoice finance. Instead of a necessary evil with burdensome requirements, it becomes a true enabler of growth and a competitive advantage.
Want to see how open-accounting transforms the client experience? Schedule a consultation with our team today.
The Fair Exchange: Why Businesses Will Share Data
Modern businesses understand the value of their financial data. They expect tangible benefits in exchange for sharing it with financial providers. The successful invoice finance provider delivers clear value through this exchange:
- Faster decisions: Reducing time-to-cash from weeks to days (5 days faster on average)
- Reduced burden: 85% less administrative work for the client
- Better terms: More accurate risk assessment enabling more competitive pricing
- Strategic insights: Value-added analysis based on standardized financial data
The evidence supports this approach: 96% of businesses with >50 employees are willing to share data to access credit when there’s a clear value proposition.
Beyond Efficiency: Transforming Risk Management and Powering AI
Perhaps the most compelling advantage of standardized financial data is its impact on risk management and future AI capabilities. Currently, 63% of commercial lenders acknowledge making credit decisions based on financial data that is 4-6 months old (S&P Global Market Intelligence).
Real-time accounting data fundamentally changes this dynamic:
- Current information: Base decisions on today’s financial reality, not historical snapshots
- Early warning signals: Identify deteriorating debtor quality before it impacts performance
- Reduced defaults: Real-time data access could reduce default rates by 36% (International Finance Corporation)
But there’s more to the story. Quality data is the foundation for all your AI and automation ambitions. Without clean, standardized financial data, even the most sophisticated AI tools will falter – it’s the classic “garbage in, garbage out” problem. By solving the fundamental data standardization challenge, you’re laying the groundwork for truly transformative AI-powered capabilities.
Contact our team to discuss how lenders are already using open-accounting.
Implementation Roadmap: Getting Started with Open-Accounting
For invoice finance providers looking to implement open-accounting capabilities, here’s a practical roadmap:
- Assess your current process: Map out your existing data collection and reconciliation workflow
- Identify friction points: Determine where clients and staff experience the most pain
- Start with a pilot: Implement open-accounting with a select group of clients
- Scale strategically: Expand to your broader client base with proven procedures
The UK Finance data reveals a significant shift in the invoice finance market, with a 24% decline in small business clients but a 47% increase in clients with turnover over £100m. Data standardization helps serve both segments efficiently.
The most successful implementations begin with clear objectives and measurable outcomes. As Barclays demonstrated, this approach can deliver remarkable results: 52% cost savings in operations, 5 days faster time to cash, and 6x ROI.
Building Internal Consensus for Change
Implementing open-accounting requires alignment across multiple stakeholders. Here’s how to address key concerns from different departments:
For Risk Teams: Emphasize how standardized, real-time data improves risk assessment accuracy and reduces defaults through earlier intervention.
For Operations: Highlight the 50% reduction in data processing costs and 75% capacity improvement for relationship managers.
For Client Experience: Focus on the 85% reduction in administrative burden for clients and dramatic improvement in time-to-cash.
For Technology: Discuss how standardized financial data creates a foundation for future AI and automation initiatives.
For Executive Leadership: Present the complete business case, including Barclays’ documented 6x ROI and 52% operational cost savings. Emphasize how open-accounting creates capacity for growth by unburdening sales teams from administrative tasks, leading to higher conversion rates and increased client lifetime value.
Need help building your business case? Contact our team to help quantify the benefits for your organization.
Seizing the Opportunity: The Time for Action is Now
Look, the invoice finance industry faces a clear choice: embrace open-accounting and data standardization to deliver experiences that modern businesses expect, or continue losing market share to more agile alternatives.
The 9,000 businesses that have moved away from invoice finance in the last decade tell a story. They’re not saying invoice finance isn’t valuable – they’re saying the experience doesn’t match their expectations in a digital world.
You have the power to change that narrative. The technology exists today to transform invoice finance through standardized, real-time accounting data. Leading institutions like Barclays, Santander, ABN AMRO, and Citi have already demonstrated the significant benefits of this approach.
For those ready to drive change, the opportunity is clear – reimagine invoice finance for the digital age by putting standardized financial data at the heart of your operations. Your clients are ready for it. Your competitors are moving toward it. The question is: how quickly will you adapt?
Next Steps
Ready to explore how standardized financial data can transform your invoice finance operations? Contact Validis today to discuss how we can help you access real-time accounting data quickly and securely through open-accounting principles.
Our proven implementation approach helps invoice finance providers achieve >90% client adoption while delivering measurable improvements in efficiency, risk management, and client satisfaction.
We get financial data. Let us show you how.
