Transform your AP department into a profit center by automating AP processes
Most finance executives view accounts payable (AP) as a cost of doing business. But tech-savvy CFOs realize the value that AP automation solutions bring. Taking advantage of AP automation can shift the focus of the department from cost control alone towards supporting the broader profit goals of the business. When adopting AP automation solutions, here are four things CFOs should consider to make sure they are maximizing their return on investment
- Capitalize on early payment discounts. Offering to pay invoices early in exchange for a discount is an offer many suppliers will take you up on. 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. Even 1 or 2 percent adds up if it’s a large portion of your spend.
- Leverage payable data for improved cash management. It’s imperative to utilize segmentation tools to optimize supplier payments. Group suppliers based on the importance of the 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?
AP automation reduces manual work, allowing staff to:
• Process more invoices daily
• Speed exception process handling
• Quickly and effectively manage vendor requests
- 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 to improve cash management and transform an organization’s crucial AP function.