Did you know CFOs have FOMO? The “Fear Of Missed Opportunities” is a real thing for executives. Seeing competitors save thousands (if not hundreds of thousands) of dollars every year with AP automation presents a distinct competitive advantage your CFO won’t want to miss out on. No matter how much of a no-brainer AP automation is for you, it’s all for naught if you are unable to communicate its myriad benefits to your CFO, who is likely the decision maker. But what will win them over? We’ve put together some tips and resources to help you convince your CFO of the value of AP automation.
Speaking the Same Language
Don’t sell AP automation as a tool to make your job easier—sell it as the solution to your CFO’s problems. Even though you and your CFO work toward the same business goals, your day-to-day duties are much different. Your CFO speaks numbers, so here are some phrases and points to keep in mind:
- The Bottom Line for the Business – Your CFO needs to understand how AP automation impacts the bottom line for your organization, not just about ease and efficiency. Communicate how automation affects the growth of properties and visibility into finances.
- Solutions Supporting Growth and Scalability – The future is now. Your boss is thinking about what the company and your department will look like in the near and far future. Your CFO always has growth and scalability top of mind. Think about your organization’s growth goals for the next few years and how AP automation has an impact.
- Controlling Cash on Hand and Costs – Controlling costs and cash on hand is critical. The CFO always considers the amount of money the organization has on hand, preferring to have available funds rather than liquidating assets for cash. Show how AP automation positively impacts cash flow and costs.
Adding Up the Costs
When you are talking to your CFO about cutting costs and saving money, keep in mind both hard costs and soft costs. CFOs want to understand the hard dollar savings that are easily identified and quantified, such as opening mail, filing invoices, or data entry. Even though soft costs are more difficult to determine, the CFO still wants to know costs associated with the time it takes to research a vendor question, approve a bill, or pull invoices for audits.
At the end of the day, your CFO wants concrete numbers. That’s why we suggest you always begin the conversation with industry numbers and stats. For example, according to Ardent Partners, Best-in-Class businesses only spend $2.52 to process a single invoice compared to the benchmark of $11.57 for most companies.
When adding up the costs to present to your CFO, dig deeper to better understand your current costs and processes. Here are a few questions to help in the excavation:
- What are your current invoice and payment processing costs?
- How long does it take to approve a single invoice?
- How much do you spend to process a single payment?
- How many invoices does your organization process a month?
Use the AvidXchange ROI Calculator to get started on the quantitative data your CFO needs. The calculator shows savings but shouldn’t be the only resource you use. Create a spreadsheet to show how you calculate the cost per invoice including the number of employees, hours, and money spent.
In addition to hard cost savings, your boss wants to know what other returns and benefits they will receive with this investment. Here are a couple of ROIs that are sometimes overlooked.
- Control – When your organization implements AP automation, you’ll have anytime, anywhere access to all invoices and payments for suppliers. You’ll always be able to see where the invoice is in the approval process, how long an approver has had it, and what’s next. Greater visibility equals more control of finances and operations.
- Time – With newfound time in the workday, employees can focus on opportunities that save time and money, such as supplier early payment discounts, rebate programs, and opportunities to build better relationships with suppliers.
- Scalability – As your organization grows and goals change, there won’t be a need to increase headcount in the AP department. Your day-to-day accounts payable tasks will be automated which makes time to focus on what matters most.
The CFO’s Common Concerns
With such a substantial investment on the line when considering AP automation implementation, it’s necessary to address all possible concerns. According to the Paystream Advisors 2018 Payables Insight Report, 36 percent of organizations aren’t investing in payment automation solutions due to lack of budget. From a processing perspective, 21 percent of organizations believe current processes are working just fine.
Other barriers come from a lack of understanding of what solutions are available, their benefits, and fear of no ROI. For building a persuasive business case, it’s critical to effectively communicate how AP automation saves your company from fraud, employee burnout, and costly manual mistakes. Here are a few common questions and responses to get you started:
- Why now? Every additional day with manual processes wastes valuable time and money spent on accounts payable processing. Years of employing these methods adds up to quite a sum that your team could spend more effectively on properties and procedures.
- Why fix what’s not broken? Staying committed to a manual, paper-based payment process increases the risk of fraud over time, causing your team to have to make time to reevaluate the procedures that seemed to be working just fine. AP automation streamlines invoicing, fraud recognition, and payment processing to give each payment the attention and security it needs. You’re not reinventing the wheel, you’re just making the cycle run smoother with streamlined processes.
- How long until we see results? Most companies notice improvements immediately, with less time and money being spent on manual invoice and processing. Over time, your team will continue to reap automation rewards including real-time reporting, visibility into payments, faster invoice approvals and improved, streamlined processes that adhere to compliance.
Before presenting your business case for AP Automation, here are a few final points to keep in mind:
- Plan your work and work your plan. Create a detailed plan for pitching AP automation, implementation, and even what the new day-to-day for your organization could look like. Include all stakeholders, departments involved, potential roadblocks and solutions.
- Pay attention to the details. Data is critical. Provide the case studies and research that closely align with your organization. Include your brand’s identity, organization’s goals, and any internal data available.
- Do a demo. Walk through your current accounts payable process and an AP automation solution to accurately speak to details, features, and benefits.
- Ask questions. Speak to an AP automation expert to get all of your questions answered or to help with calculations. We’ll show you how to make the most of your accounting system, AP automation solution, and current processes without giving up an ounce of control.