The top 4 ways CFOs are maximizing ROI with AP automation
Ask finance executives their thoughts on Accounts Payable and they’ll likely give you the same answer – it’s the 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 of doing business into a revenue generator.
Here are Ijams reasons for automating AP:
1. 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, according to PayStream.
By speeding invoice approvals with automation, you gain the ability to negotiate deals with your vendors.
“Your invoice may not have a discount on it, but if you offer to pay it early in exchange for a 1.5 percent to 2 percent discount, 30 percent of the time suppliers will take you up on that,” Ijams said. “That’s pretty compelling if you can get a third of your spend to take a discount in some form.”
It will also make you a superstar.
2. Leverage payables data for improved cash management
It’s imperative to utilize segmentation tools to optimize supplier payments. Doing so not only increases visibility into your cash flow, but also increases disbursement effectiveness.
Ijams suggests grouping suppliers together based on the importance of the supplier relationship, the volume of payments and the value of the purchases. By prioritizing payments, you’ll improve vendor relationships while also ensuring prompt payment.
3. 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 your staff to:
- Process more invoices daily
- Speed exception process handling
- Quickly and effectively manage vendor requests and exceptions
4. Transform AP into a profit center
By automating invoice payments, 84 percent of organizations reduce overall payment costs, according to PayStream’s 2015 Electronic Supplier Payments Report.
“The savvy CFO figures out there’s improved cash management,” Ijams said. “It’s not just about getting rid of paper checks – you can get lots of benefits that will turn AP into a profit center.”
So, are you a savvy CFO? How are you transforming AP in your organization?