0 Replies Latest reply on Jul 14, 2010 11:26 AM by jtucker

    Are You Aligning Your Business to Manage Cash Better?

    jtucker Journeyman

      AstraZeneca: Aligning the Business to Manage Cash Better James Dyer, P2P global process owner for AstraZeneca, joined me on June 29th to close out the first half of our 2010 best-practice webinar series. James shared AstraZeneca's transformation and success achieved by closely aligning the business objectives of procurement, accounts payable, and treasury finance.


      In his presentation, “How to Secure 94% Payment on Time and Optimise Working Capital"this UK-based executive showed how working capital can in fact be reduced, days payable outstanding (DPO) increased, while still achieving on-time payment goals and maximizing negotiated early payment discount savings.


      AstraZeneca accomplished this by adopting standard payment terms of 60 days, and offering to pay suppliers sooner, by day 15, for a 2% discount. The net effect has been an extension of DPO while increasing early payment discountsto have a real impact on bottom line savings. This also helped reduce risk in AstraZeneca's supply chain by offering early payment options to targeted suppliers who really need the cash to run their operations.


      According to James Dyer, achieving these kinds of results requires “utilizing enabling technologiesto achieve efficiencies and improve compliance.” Ariba is helping AstraZeneca on both fronts, ensuring supplier, contract and price compliance while also supporting its working capital objectives.


      James also talked about how Ariba is helping AstraZeneca standardize processes to reduce PO and invoice exceptions, improve approval workflow cycle time, and ensure that the goals of procurement and finance are linked to strategic goals. 


      If you missed the live presentation, you can catch the recording here


      And you too may learn how to align your business objectives to manage cash better.