Businesses expect their CFO to be more than a financial scorekeeper. They want their CFO to drive strategic growth initiatives and to get a tighter grip on costs by improving the efficiency of core processes and increasing collaboration with enterprise stakeholders.
As a result, CFOs need technologies, tools and strategies that can help them improve the performance of their finance function, while optimizing working capital and better managing corporate spending.
That’s what makes electronic payments automation so appealing to CFOs.
How Electronic Payments Improve Financial Performance
- Paper checks cost 30 times as much as electronic payments, studies show. Paper checks require staff to print, sign and mail paper checks, replace lost checks, respond to supplier inquiries, reconcile payments and invoices, and add staff as volume increases. Checks are also responsible for more fraud losses than electronic payments. The money saved from electronic payments can support the business and be invested in projects that yield long-term growth.
- Paying suppliers via certain card programs enables CFOs to instantly extend Days Payable Outstanding (DPO) without requiring any changes to standard payment terms. Extending DPO provides CFOs with the cash they need to pay down corporate debt, make capital investments, increase research and development, or support other growth initiatives.
- The early-payment discounts enabled by electronic payments provide CFOs with risk-free returns on the business’ cash. Businesses achieve an average 2 percent return on the invoice due amount on payments made early, per the Institute of Finance and Management (IOFM). But many organizations in industries such as biotechnology, pharmaceuticals, consumer packaged goods, high tech consulting earn even higher early-payment discounts, IOFM finds.
- Electronic payments solutions provide CFOs with real-time visibility into critical working capital and spending metrics such as accruals, spending per supplier, department spending, DPO, late-payment penalties, a percentage of early-payment discounts captured, a percentage of payments made electronically, cost per payment processed and more. CFOs rely on these types of metrics to tightly manage their business’ working capital to forecast cash needs.
- Paying suppliers electronically frees finance staff to focus on value-added working capital activities such as working capital or spend analysis, supplier management, and vendor master management. Staff no longer are burdened by transaction processing tasks such as printing and mailing checks, fielding supplier inquiries, and reconciling payments with invoices.
Optimizing working capital is essential to business growth. That’s why businesses want their CFO to break out of their traditional role as a financial scorekeeper and to take control over the business’ cash.
Speak To An Expert
Wondering how much money your organization might find from early payment discounts? ACOM Solutions experts can provide a no-obligation analysis of your payments to identify opportunities.