In the next few days, the Law on Creation and Growth of Companies or Law ‘Create and Grow’, the Government’s commitment, will come into force to fight delinquency and also, as its name suggests, to facilitate the creation and growth of companies.
Two figures reflect the importance of this commitment: the average supplier payment period amounts to 84.8 days, compared to 81.6 days in 2021 and the rate of indebtedness already exceeds 100% of the net worth of SMEs, according to the latest ‘Morosidad Observatory’ of the Spanish Confederation of small and medium-sized enterprises (Cepyme). But, in addition, this report contains another piece of information that seems especially significant to me: the profitability of SMEs has fallen by a quarter since 2019.
The context of uncertainty that we are going through is generating a contradictory dynamic in the economic fabric of our country. On the one hand, the imperative to digitize business is more pressing than ever in the current post-pandemic climate, in a Europe determined to close the gap with Asia and North America in the technology race. And on the other, the economic wound started with the Covid, and increased by the current climate of high inflation and energy uncertainty, prevents many small and medium-sized companies from allocating the necessary investment to digitize their operations.
Last June, I had the opportunity to present the results of a report prepared by Grupo Primavera, now part of Cegid, which highlighted low levels of adoption of digital solutions of business management in our country and in neighboring Portugal. Compared to a penetration rate of these cloud-based tools of 40% in Spain and 29% in Portugal, 47% of Italian companies and 67% of British companies have incorporated cloud management software. At that time, I spoke about the opportunity that these figures represented to promote the mobilization of funds from the “Digital Kit” initiative and help SMEs to gain efficiency and profitability with technological tools.
The Create and Grow Law imposes on companies and the self-employed the adoption of electronic invoicing to improve the traceability and control of payments in real time and, with this, among other advantages, better manage delinquency. But the implementation of electronic invoicing requires a certain level of digitization of our SMEs, which implies investment, as well as knowledge and awareness of companies and freelancers about the benefits that these technological solutions can bring to said companies. For the first, they will be provided Digital Kit Program resources within the Recovery Plan for the digitization of SMEs. The objective is to implement the “e-invoice”, an initiative that can become the first step for many companies and freelancers to begin to familiarize themselves with this type of technological solution.
For the latter, the so-called digitizing agents, that is, the companies in charge of accompanying the implementation of said technologies, as is the case of all the companies of Grupo Primavera, A Cegid Company. As digitizing agents, our responsibility is to help companies in the transition to electronic invoicing by offering intuitive solutions that are quick to implement. Here, without a doubt, the experience with the implementation of electronic invoicing in the Basque Country -TicketBAI-, in force since this year, will serve as a reference, so those companies that offer it, as is the case of Billage, Ekon, Diez and other Grupo Primavera brands, to Cegid Company, They will have a clear advantage for customers.
Thanks to this initiative of the Digital Kit, we are an active part and we also offer companies the management and procedures of the funds free of charge, we take another step in what I consider to be our great obligation as agents of change: to ensure that these companies carry these efficiency improvements to other areas such as customer and order management, or internal or employee administration, following their (satisfactory) experience with electronic invoicing.
Also, I trust that this business digitization effort will bring about a second virtuous effect: reverse the loss of business profitability that the Cepyme report confirms, thanks to substantial improvements in the efficiency of its processes. Only in this way, with this double victory against the elements, will we have turned a legal obligation to digitize into the boost that our business fabric and our society need.
Santiago Solanas, CEO of Grupo Primavera, A Cegid Company, and head of Cegid’s business in Iberia, LatAm and Africa
