More CFOs recognize the business advantage of a networked enterprise. As a result, they are becoming more involved in decisions about technology, according to a Robert Half Management survey published by Proformative.
In assessing the results of the survey, an executive from Robert Half Management stated, "Finance executives increasingly view enhanced information technology capabilities as a route for the enterprise to achieve efficiencies and boost productivity."
E-invoicing is one area where the productivity breakthroughs are considerable. There are other reasons, however, why CFOs and finance executives should be drivers of e-invoicing initiatives: the impact on working capital. Often overlooked in an invoice automation initiative is the ability to better manage cash through dynamic discounting.
In the old world of the manual processing of paper invoices, a supplier either offered a discount, or they didn't; and you took the discount within the defined discount period (for example, by day 10 in a 2% 10 net 30 payment term) or you missed it.
A business commerce network introduces a new world of collaborative finance. Prorated discount terms enable discount capture after the discount due date on a sliding scale; for example, a “2%10 net 30 prorated” discount gives you a two percent discount for paying within 10 days of the invoice date, or a prorated discount rate over the remaining days. Dynamic discounting lets suppliers control the acceleration of payment on approved net term invoices (e.g., net 60) on an ad-hoc basis in exchange for a discount. Ariba Discount Professional, for example, can automatically present discount offers to suppliers whenever an invoice from a particular supplier or group of suppliers is approved. At that point, the supplier can choose to accelerate payment simply by clicking a button. The Ariba Cash Flow Optimizer™ feature lets suppliers rapidly determine cash flow needs, identify invoices that qualify for early payment discounts, and then select those they wish to accept.
In today's uncertain economic environment, collaborative finance management offers a significant business advantage for buyers and sellers. If this would be news to your CFO, you should break it to him today.