Manual contract processing costs UK businesses £10 million a year

05 November 2019 3 min. read

A survey of senior staff has found that manual contract processing and poor contract management is costing companies as much as £10 million in inefficiencies every year, leaving around six in ten considering full digitisation in the next few years.

A recent report by Sage revealed that the average small business spends 120 days per year on admin – time which could otherwise be spent growing their client base and creating new opportunities. Robots are much more efficient at handling routine admin tasks than humans, so robotic process automation (RPA) devices can help companies with a wide range of admin tasks; for example, creating and delivering invoices, matching incoming payments with the correct invoice, record-keeping, and much more.

As a result, the number of businesses with automation able to handle a growing amount of work in a capable, cost-effective manner has doubled in 2019. To that end, one paper published by Deloitte in September found that 8% of organisations around the world have already delivered over 50 automations in the last year. With that figure set to rise in coming months, the age of automation is firmly here to stay.

Percentage of companies that have lost money due to having manual processes

Despite this surge in popularity for automation, however, digital consultancy 4C has released research revealing that UK businesses are still losing millions of pounds due to manual processing of agreements. The average loss for those without a fully automated agreements process is over £10 million a year, while a staggering 28% of firms cited losses of £1 million or more as a result.

Jani Van Hecke, Head of 4C's Contract Lifecycle Management practice said, “Businesses often neglect the non-customer-facing part of their operation, so it’s no surprise that the manual processing of agreements is resulting in lost money and time for companies across the UK. This research highlights the true scale of the problem that out-dated processes create and serves as a wake-up call to UK businesses.”

According to the survey of over 500 professionals, finance was the worst hit of any industry by this, with 47% of firms in the sector having lost money due to manual processes, while manufacturing (41%) and technology (35%) similarly dragging their feet on the matter – despite perhaps being better positioned to understand the benefits of automation. The failure of businesses to automate this function is resulting in a huge waste of resources beyond money, as well.

Three in five (59%) consider full digitisation over the next few years very important to their business

The study found that UK businesses are spending an average of nine working days a month processing agreements, while one in ten is spending over 200 hours. With regards to this, it is even more surprising that so few firms have adopted completely automated processes for managing contracts and agreements – with only one in ten companies currently doing so. Fortunately, 4C did find that change is on the horizon.

At present, a majority of 59% of UK businesses are weighing up full digitisation over the next few years, with three in every five considering this very important to their business. This is particularly common in the manufacturing (63%) and finance (61%) sectors – which makes sense having seen that these are the sectors presently losing most time and money to manual contract processing. The key perceived benefits of automating agreement processes are data safety at 34%, and cost reduction at 35%.

Gareth Stephens, the CEO of 4C commented, “It’s encouraging to see UK businesses recognise the digitisation and automation of their manual agreement processes as important to their operation. Cost and data security are cited as barriers to automation, yet our report shows that manual processing of contracts is hurting their revenues. By shifting company culture to make agreement automation a priority businesses can protect their data and drive business growth.”