4 Things CFOs Love About Paying Suppliers Electronically
Paying suppliers electronically has many benefits, but there are four things that CFOs really love about electronic payments.
Paying 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.
However, many accounts payable leaders are reluctant to bring up electronic payments with their CFO, fearing 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 paying suppliers electronically for four important reasons:
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 earn 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 into a profit center. The money earned through cash-back rebates can provide CFOs with funds to re-invest 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 can deploy without disrupting existing processes or bank relationships and seamlessly integrate with any ERP. A single payment file upload initiates payment to a buyer’s suppliers. Then, 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. In addition, the technology ensures that suppliers are paid accurately and on time.
Moreover, suppliers receive rich remittance data to post payments to their receivables system easily. 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 gives CFOs 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 the invoice and payment data they need to guide their business. Working with best-in-class solutions providers supplies 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 deploy 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. Furthermore, buyers don’t have to dedicate resources to onboard suppliers or collect forms from suppliers who agree to electronic payments. Best-in-class electronic payment solutions providers handle 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.
Edenred Pay, an Edenred Company, is the global leader in invoice-to-pay automation. Our integrated platform connects businesses with suppliers, ERPs, banks, FinTechs, and payment rails to automate, optimize, and monetize the entire B2B payments lifecycle – from invoice receipt through payment reconciliation. Edenred Pay’s efficient, integrated solutions create a frictionless process and help deliver value to the enterprise by enhancing visibility and monetizing AP.