7 Reasons to Get Your CFO to Say ‘Yes’ to AP Automation
CFOs wear many hats, but ensuring their finance department operates effectively remains the biggest priority. While your CFO is concerned with the financial health of your business, helping them understand the value of finance automation can be challenging.
Although automating routine tasks helps finance departments do more with less, many CFOs are hesitant to automate Accounts Payable (AP) because they fear a loss of control over processes and do not prioritize back-office business operations. In reality, AP Automation allows finance leaders to reduce costs and increase visibility into cash flow with real-time data insights and reports, which is difficult with manual, paper-based accounting processes.
In fact, 94% of CFOs are investing in digital technologies in at least one area of payments and finance, with 87% planning to invest in the future1.
We’ve put together 7 talking points to help you present a strong case for AP Automation to your CFO.
1. Reduced costs:
Demonstrating the ROI of AP Automation is the most critical step in convincing your CFO to automate AP. Manual, paper-based processes are costly, time-consuming, and potentially damage supplier relationships. Show proof of this. Explain that by investing 5-10 hours in implementing AP Automation, your department could cut invoice processing costs by 60%-70% and payment processing costs by 80%-90%. Additionally, automation will produce cost savings as you avoid late payment fees, take advantage of early payment discounts, reduce human error, and put a stop to duplicate payments.
2. Increased Visibility
Manual AP processes lack visibility into cash flow, which is the lifeblood of any business. Explain to your CFO that real-time visibility into cash flow and corporate spending enables businesses to understand their short-term and long-term working capital needs, identify potential gaps and adjust as needed. This is especially important during times of economic uncertainty.
3. Increased Efficiency
Inefficiencies eat up your company’s time and resources. Highlight data that shows how automation saves AP departments thousands of hours annually. To illustrate, the average industry time to route and approve payments is 28 days2, and the average time to manually process one invoice is 10 days3. Automation speeds up invoice and payment processing by 80%, which helps your business grow and remain competitive. Also, automation eliminates manual data entry, which consumes your staff’s day.
4. Access to real-time data insights and reports:
Access to real-time reporting and on-demand data is necessary for your CFO to gain valuable insights into finance operations. Best-in-class Invoice Automation document history allows users to search through uploaded invoices and see who an invoice is awaiting approval from in real-time. Payment Automation also has expanded reporting capabilities, giving users more transparency through self-service reporting. This includes a payment history report, archived documents, and a payment status report.
Ask your CFO “Did you know that your current check processing is posting risks and exposing your AP payments to payment fraud risk”? In 2021, 66% of companies paying by check experienced real or attempted fraud, compared to only 3% when paying with single-use virtual cards4. With internal and external threats on the rise, AP teams have no time to lose in mitigating the risk of payment fraud, safeguarding sensitive banking information, and ensuring the integrity of the accounting system. Electronic payment solutions, such as virtual cards and ACH transactions, provide greater protection than paper checks, mitigating the risk of payment fraud. It’s also imperative that your CFO invests in technology that protects AP departments from fraud schemes like vendor impersonation, business email compromise, phishing, and conversation hijacking.
The role of the CFO is quickly changing and expanding, which means that they are responsible for more than ever before, including compliance. Best-in-class automation solutions helps with audits by providing your finance team with a fail-safe electronic paper trail. Once implemented, all invoices have an electronic record of approvals, changes, and additional notes so auditors can easily view the process from start to finish. Automation also eases the stress of audit season by helping you securely manage costly and time-consuming audit processes like the following:
- ACH Rules Compliance Audit
This audit, required by the NACHA Operating Rules, states that all participating depository financial institutions, Third-Party Service Providers, and Third-Party Senders conduct a risk-based ACH Rules Compliance Audit each year.
- SOC 2
Developed by the Association of International Certified Professional Accountants (AICPA), this audit is specifically designed for service providers storing customer data in the cloud.
- The Payment Card Industry Data Security Standard (PCI DSS)
Launched in 2006, this a set of requirements intended to ensure that all companies that process, store, or transmit credit card information maintain a secure environment.
Top solutions have built-in compliance-enhancing functions, such as centralized record-keeping for audit purposes, critical to demonstrating The Office of Foreign Assets Control (OFAC) compliance.
Are your employees satisfied? That’s an important question to ask your CFO. A typical AP Specialist spends around 84% of their day on manual tasks5. This makes recruiting and retaining top talent increasingly difficult as advanced technology takes the world by storm. Scalable cloud-based AP solutions grow with your company while also keeping your employees happy. In an automated office, employees have time to focus on high-value tasks or leverage automation to advance their careers.
You know that implementing AP Automation is the right move for your finance team, but it may be difficult to make the sell to your CFO if they are skeptical. These talking points will help you prepare to answer any questions your CFO may have about automation and help them better understand how it drives efficiency, enhances security, and decreases operating costs in your AP department.
To get started with Paymerang’s award-winning AP Automation, schedule a demo today.
1PYMNTS: 9 in 10 CFOs Focused on Payments Automation and Transformation
2Ardent: Accounts Payable Metrics that Matter that Matter in 2020
3Ardent: Partners’ Accounts Payable Metrics that Matter in 2022
4The Association for Finance Professionals