A clear picture of the impact of the Covid-19 crisis per business sector
A first of its kind, the Sidetrade tracker analyses the impact of the Covid-19 crisis on twelve business sectors. As of 25 May, the UK sectors hardest hit by payment delays tied to the crisis are:
Finance, Insurance, Real Estate: 76% of invoices over 10 days overdue
ICT (Information, Communication, Technology): 60% of invoices over 10 days overdue
Leisure, Hospitality: 55% of invoices over 10 days overdue
Note that Finance, Insurance, Real Estate, as well as ICT are areas where late payment rate was already high prior to the pandemic: 56% and 53% respectively.Sectors least impacted by the crisis include Food industry (19% invoices over 10 days overdue), retail (22%) and manufacturing (23%).
Hard hit by the crisis, the UK seems to be seeing the first effects of lockdown exit
Evidence from the Sidetrade tracker shows a strong correlation between payment behaviour and economic activity. The latest tracker release was highly awaited this week to see the effect of exit from lockdown. With 38% unpaid invoices as of 25 May 2020, the UK has seen a slight improvement in customer-supplier relations. This is the first positive effect of lockdown exit.
38% of invoices by value are at least ten days overdue, as the UK is beginning to feel the effects of lock-down exit.
However, by volume, the percentage is 49%! This is a increase since the pandemic of 209%
The sectors hardest hit by late payments in the UK since 25 May are Real estate, hospitality and ICT.
Prior to the covid-19 pandemic, late payments were already an issue in Finance, Insurance, Real Estate (56%), and in ICT( 53%).
Sectors least impacted by the crisis include Food industry (19% invoices over 10 days overdue), retail (22%) and manufacturing (23%).
Late payments have been fluctuating in May between 35% and 39% by value but this an improvement from the peak at the end of April of 43%
However, It is still far worse than before the pandemic lock-down when late payments in the UK were fluctuating between 25% and 29% by value. So late payments by value have increased by approximately 40% since the lock-down started.
Forward thinking SMEs across the UK will now have a cutting-edge accounts receivable solution within their grasp, thanks to a new partnership between AI firm Sidetrade, and Threadgold Consulting.
Threadgold Consulting is a specialist ERP consultancy, enabling businesses to use cutting edge SaaS products for efficiency, scalability, intelligence, and risk reduction. They also develop innovative proprietary solutions. Karl Threadgold, managing director of Threadgold Consulting, says the decision to partner with Sidetrade was easy, thanks to Sidetrade’s long history of delivering powerful accounts receivables (A/R) platforms based on AI technology.
“We are excited to take advantage of these enterprise-grade technologies for our customers, to augment the capabilities of their cloud-based ERP. We’re looking forward to bringing the power of Sidetrade’s solutions into the savvy and sophisticated SME market,” said Mr Threadgold.
Sidetrade supports CFOs with challenges such as improving working capital, accelerating cashflow generation and reducing bad debt. Sidetrade receivables solutions provide cashflow visibility in real time, improve collections, and increase customer satisfaction by resolving disputes faster.
Aimie, Sidetrade’s artificial intelligence assistant, automates A/R, generates credit management team workloads, and recommends the most effective customer dunning strategies. Aimie also takes on and automates many of the large-volume, repetitive tasks associated with accounts receivable, freeing up staff time for value-added work.
“There is huge potential to scale up significantly across specific ERP user communities. Our partnership will create a new entry point for smaller but scaling companies to get the edge over competitors. AI gives scaling companies a better handle on cash management, which means they can be less reliant on loans and other external funding. It also helps them show potential investors that they have responsible customer relations and cashflow, making them a more attractive investor opportunity,” says Sunil Pandit, partner and alliances lead at Sidetrade.
Olivier Novasque, CEO of Sidetrade, had this to say:
“Our Q1 performance was very satisfying, and for this I would like to thank all of the Sidetrade teams, 100% of whom teleworked so brilliantly to continue our business and provide flawless service to our clients. In the unprecedented context of a pandemic with uncertain economic repercussions, there are nonetheless two significant trends which could have a positive effect on Sidetrade’s business in the months ahead. Firstly, the pandemic is acting as a catalyst for digital transformation, accelerating investment in SaaS and AI to optimize business processes. Secondly, the tidal wave of unpaid invoices is focusing the attention of every CFO on cash flow security. In this new paradigm, Sidetrade solutions are ideally positioned to deal with these issues that have become more critical than ever. This is why, despite the crisis, we have every confidence in our ability to make 2020 a new year of growth. We are well-positioned to embrace the future with optimism.”
14% growth demonstrates resilience of Sidetrade’s SaaS model
SIDETRADE (MILLIONS OF EUROS)
2020 Q1
2019 Q1
VARIATION (%)
REVENUE
6.8
6.0
+ 14%
2020 information from unaudited consolidated data.
In the first quarter of 2020, Sidetrade generated €6.8m in revenue, organic growth of 14% vs. 2019 for the same period (which was already up 14 vs. Q1 2018). In fact, Q1 growth was not impacted by the covid-19 pandemic.
The recurrence of Sidetrade’s SaaS business model partially shields Sidetrade from the economic crisis. Let us recall that 89% of Sidetrade’s revenues are recurrent, based on multi-year contracts (initial period of 41.1 months, on average), and that the company has an extremely low churn rate of 3.9%.
Optimistic outlook for 2020 and beyond
As the unpaid invoices surges, Sidetrade provides invaluable data
The pandemic has resulted in an unparalleled increase in late payment. In UK, for example, unpaid invoices have risen a worrying 42% on 04/04/2020. To monitor the impact of the pandemic on overdue invoices, Sidetrade has launched an open-access tracker which anonymously shows payment behavior trends for 3.7m businesses in six European countries (France, the UK, Spain, Italy, Belgium, and the Netherlands).
Sidetrade’s exclusive technology is used to analyze over 26 million invoices, issued since 1 January 2020, totalling to €54bn in B2B transactions. The tracker is made possible by Sidetrade’s unique B2B transactions database, confirming the company’s leadership position.
Seeing small and medium enterprises through the crisis
Faced with an explosion of late payments, SMEs are hit hard by the pandemic, threatening their very survival. In response, Sidetrade decided to scale down their technology, initially designed for larger companies, and offer it free of charge to smaller businesses (sales of €10m to €500m) during the crisis. CashControl controls and secures cashflow (see press release of 31 March 2020). Backed by powerful machine-learning algorithms, the technology features unlimited digital dunning letter, as well as management of payment schedules.
The success of the special CashControl offer could be a springboard for Sidetrade to break into a new market segment.
Covid-19 quickening the pace of digital transformation
Crisis conditions have visibly pushed companies to more readily adopt new technologies and cloud-based tools, pushing the world more quickly toward a digital economy. Virtualization, robotic process automation and AI technologies are not in the pipeline; they are here and now. For SaaS editors like Sidetrade, accelerated digital transformation is an awesome growth opportunity. A further growth opportunity comes from the need of businesses squeezed by the crisis to shorten the order-to-cash process and get the revenue in. Sidetrade is extremely well positioned to help them. Let us recall that this is a high-growth market estimated at $3bn by the year 2024, according to a Research & Markets study.
With a SaaS model that has proven its resilience, Sidetrade is set to make a name for itself in the global AI market. Management is looking forward to yet another year of growth.
