4 Things CFOs Love About Paying Suppliers Electronically

Posted by Rich Arminio on Oct 27, 2021 11:17:16 AM
Rich Arminio
Paying more suppliers electronically has moved up on the accounts payable department’s agenda.

And for good reason: compared to paper checks, electronic payments cost less, result in fewer errors, are timelier, provide buyers and sellers with better visibility, and result in considerably less fraud.

Unlike paper checks, your staff doesn’t have to be in the office to initiate electronic payments.

How CFOs Benefit from Electronic Supplier Payments

But many accounts payable leaders are reluctant to bring up electronic payments with their CFO for fear that they won’t like the idea. Some worry that their CFO will think that migrating to electronic payments is too disruptive or resource intensive. Others believe that their CFO is resistant to change.

The reality is that CFOs love electronic supplier payments for four important reasons:

CFOs love Paying Suppliers Electronically


1. Lucrative cash-back rebates: What really has CFOs excited about electronic payments is the opportunity to earn cash-back rebates on payments made via virtual card. Businesses that work with best-in-class solutions providers are earning cash-back rebates on 50 percent of their spending. In some cases, the cash-back rebates earned by businesses have single-handedly transformed their accounts payable department to a profit center. The money earned through cash-back rebates can provide CFOs with money to invest back in the business.

2. Higher profit margins: Electronic payment solutions significantly reduce the costs of paying suppliers. For starters, best-in-class electronic payment solutions use robotic process automation (RPA) and machine learning (ML) to streamline payment operations. The technology also can be deployed without disrupting existing processes or bank relationships and can be seamlessly integrated with any ERP. A single payment file upload initiates payment to all a buyer’s suppliers; instructions are parsed, and payments are remitted in all payment methods. This eliminates the need to log in to multiple bank systems and wipes out the costs of printing and mailing paper checks. And the technology ensures that suppliers are paid accurately and on time. What’s more, suppliers are sent the rich remittance data they need to easily post payments to their receivables system. Finally, payments are reconciled in real-time, eliminating the need for buyers to manually key data or decode bank messages.

3. Better working capital management: Paying suppliers electronically provides CFOs with critical insights into cash flows, corporate spending, and accounts payable operations performance. CFOs can drill down into cash flow information, analyze issues, and uncover opportunities for driving corporate profitability. The leading solutions empower CFOs with real-time access to invoice and payment data, providing them with the smart insights they need to guide their business. Leading solutions provide CFOs with business intelligence such as:

  • On-time payment percentage
  • Spend visibility and trends
  • Spend-to-supplier ratio
  • Accounts payable value and volumes
  • Accounts payable process metrics
  • Payment and discount capture metrics
  • Team productivity metrics


4. Quick win: Leading electronic payment solutions are deployed fast and with minimal risk, providing an exceptional return on investment. There is no software or hardware to buy, install or maintain. Buyers don’t have to pay CapEx or OpEx costs. And buyers don’t have to dedicate resources to onboard suppliers or collect forms from suppliers who agree to be paid electronically; leading electronic payments solutions providers handles it all for them.

Corporate spending. Profitability. Working capital management. Risk.

These are the things that keep CFOs up at night. And they are all addressed by paying more suppliers electronically.

Ready to pay more of your suppliers electronically?

If so, IPS wants to speak with you. Contact us to chat with one of our payment experts.

 

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Tags: AP Workflow, Invoice Processing, AP Automation, Accounts Payable Workflow, AP Automation Solutions, Accounts Payable Automation, AP Supplier Payments