Getting buy-in from the CFO can be the last, and most difficult, step in the move towards automating your AP processes. Here are their 3 biggest concerns and how to address them.
You’ve done the research….you’ve explored the options…now you’ve got to bring your CFO over to your side with a convincing argument as to why implementing an accounts payable automation solution would be a smart move for the company. What’s absolutely essential to your discussion is an understanding of the main issues and goals your CFO needs to address and how to make clear how AP’s benefits will translate into benefits for the whole company.
You already know the basic benefits that the company realizes when it transforms its AP functions from a paper and manual handling process to one that’s fully automated, end-to-end. The savings in time and money is significant. An Ardent Partners e-payables white paper from 2015 found that for companies who have automated and are considered best-in-class, the cost to process an invoice is $2.94 vs. $15.96 for the rest. When it comes to time to process, best-in-class companies take only 3.6 days as compared to 16.6 days for the rest.
What are your CFO’s 3 biggest concerns?
Certainly, cutting costs, especially in back-office functions, is important and it definitely addresses one of the three major concerns your CFO has. Answering all of these concerns, step-by-step, will help you convince your CFO that AP automation is the right move for the company.
1. Increase profitability – You can see above how cutting costs helps increase profitability but that’s not the only way this happens. Profitability also comes from the fact that a FTE without automation can process 1,000 invoices per month, while a FTE with AP automation can process 5,000 invoices within that same time period. Automating the invoice approval cycle, which is a result of automated workflow and e-invoicing, speeds up the payment time. That means avoiding late payment fees and increasing discount capture.
2. Enable better forecasting – One of the most important developments in AP automation solutions is the unprecedented 24/7, real-time visibility the solution provides to all stakeholders, including the CFO, regarding invoice workflow and status. This gives management the information they need to better manage cash flow and working capital. Better insight into vendor history will also help procurement negotiate more advantageous terms going forward. Also, it’s essential that you ensure that whatever solution you’re looking to implement has a robust data analytics and reporting capability. This will not only allow senior management to forecast with greater accuracy going forward; it will also enable them to create KPIs which will allow them to continually measure the performance of the department.
3. Ease compliance – When it comes to company audits, accuracy has never had greater importance, especially with financial monitoring and reporting requirements that now exist, including SOX, SEC, and other laws and regulations. Automation provides a complete audit trail with full documentation and backup that is significantly easier to access than would be possible with paper documents.
If you can address these issues effectively and show how automation can deliver faster ROI, you’re on your way to a successful presentation. As The Accounts Payable Network (TAPN) noted back in 2014, “CFOs will embrace solutions that furnish the information and functionality necessary to improve the accuracy, timeliness, and overall quality of their projections.”
Download this Corcentric webinar to discover how to sell your CFO on AP automation.