The top 4 ways CFOs maximize ROI with AP automation.Posted on
Most finance executives view accounts payable (AP) as a cost of doing business. But tech-savvy CFOs realize the value AP automation solutions bring to this critical business function. While AP may not be the focus of a CFO’s day-to-day activities, taking advantage of AP automation can turn this department from a cost center into a profit center. As they adopt AP automation solutions, CFOs should consider four things to make sure they are maximizing their return on investment.
Capitalize on early payment discounts
Savvy CFOs know that by digitizing the invoice approval process, they save time and money. However, only 29 percent of organizations take advantage of early payment discounts. By speeding invoice approvals with
automation, you gain the ability to negotiate deals with your vendors. Offering to pay invoices early in exchange for a discount is an offer many suppliers will take you up on. Even 1 or 2 percent adds up if it’s a third of your spend.
Leverage payable data for improved cash management
It’s imperative to utilize segmentation tools to optimize supplier payments. This not only improves visibility into cash flow, but also increases disbursement effectiveness. Group suppliers together based on the importance of the supplier relationship to your business, the volume of payments and the value of the purchase. This improves vendor relationships while also ensuring prompt payment.
Create scalable processes that reduce hiring needs
If your AP department isn’t automated, how are staff members using their time? Are they frustrated because they’re always hunting for information?
AP automation reduces manual work, allowing staff to:
- Process more invoices daily
- Speed exception process handling
- Quickly and effectively manage vendor requests and exceptions
Transform AP into a profit center
Eighty-four percent of organizations that automate invoice payments reduce overall payment costs. These organizations’ CFOs see AP automation as more than just a means to getting rid of paper. They see an opportunity for improved cash management and better workflow that can transform an organization’s crucial AP function.
This article was originally published by OnBase