Recent economic shifts fueled by rising inflation, extended supply chain disruptions, and continued effects from the pandemic have made it vital for companies to have clear visibility into how they procure and pay for goods and services. As uncertainty continues and the threat of recession looms, the need for spend management and cost controls – along with new strategies to decrease risk and improve cash flow – is top of mind for many procurement, finance, and accounts payable teams.
Digital technologies offer a key resource to meet this need, as a recent SAP customer benchmarking study of more than 100 leading global companies shows. By using SAP Ariba solutions, the top tier of customers realized big benefits despite ongoing supply chain challenges. Improved efficiency in invoice management and processing was a major contributor to this success, allowing these organizations to drive significantly higher savings and productivity gains than their peers. The following metrics offer highlights of the results they achieved.
The top tier of customers processed 70% more invoices per FTE and achieved 100% faster invoice approval than average customers.
What does this mean? Accelerating invoice processing through automation should be a central focus for AP teams, supporting the move toward e-invoicing and increasingly touchless processes. For example, with electronic workflow routing plus automated escalation and delegation powered by SAP Ariba solutions, top-tier companies shortened invoice approval cycle times to less than two days – greatly reducing the delays typical with manual processing while also lowering costs.
Top-tier customers drove more than US$1 million savings per $1 billion in spend.
What does this mean? Through faster invoice processing and the ability to capture early payment discounts at any point, companies can enhance their cash flow and working capital position. Automated discount management can be especially helpful for stabilizing supply chains during rocky economic periods, giving strategic suppliers an immediate, non-debt source of working capital while allowing buyers to boost savings and increase returns on short-term cash.
What spending trends are you seeing in your company?
Seeing the successes these top companies are having throughout all the turmoil is hopefully inspiring to you and your organization, as benefits like these are just the beginning in helping to minimize risk. If you are interested in learning more about the benchmark study results, you can click the following link which will take you to a recently published infographic highlighting additional data points.
How are you reducing risk and increasing cash on hand? Please share and comment below so we can discuss!