Selling Finance Automation Solutions to your CFO

Businesses across all industries are facing unprecedented levels of uncertainty. Supply chain disruptions, high inflation, and other challenges are putting CFOs under intense pressure to find solutions to enhance financial performance, expand risk management capabilities and improve efficiencies throughout their organisation.

92% of Chief Financial Officers are readying their businesses for a recession this year, spurring them to invest in automated solutions that drive down costs and facilitate growth. 

A 2022 CFO study by Gartner found digital acceleration was the highest investment priority for the majority of CFOs over the next 12 months. Specifically, one-third of survey respondents plan to invest in back-office technologies, such as AP automation solutions. 

This article will explain how Accounts Payable teams can advise CFOs on implementing highly-efficient finance automation technologies. It will also highlight the benefits of  Total AP, which can help companies streamline and digitise 100% of invoices. 

Understanding your Chief Financial Officer’s priorities

CFOs know a successful digital transformation strategy is pivotal to boosting competitiveness in an increasingly globalised economy. However, depending on the industry and markets they operate in, each CFO will prioritise certain aspects of digital transformation over others. 

For instance, some CFOs may be primarily focused on technologies that can drive down operational costs, while others will be looking to build their tech stack so they can explore new revenue opportunities. To win a CFO’s approval for AP automation investment, AP teams must first understand their finance leader’s key focus areas before making their case. 

With that in mind, here is a list of common CFO objectives that can be optimised with digitally-enhanced AP processes: 

Providing insight

Many CFOs feeling the impact of the uncertain economic climate will focus their energies on assuring growth and future-proofing operations, which often involves the creation of reports and projections for other executives. A 2022 PwC study found that CFOs spend an average of 23% of their time providing insights to senior leaders. 

However, 49% of CFOs also said preparing business reports involves too many manual processes, making it a time-consuming and difficult task. Automated solutions to help CFOs compile accurate reports or projections and analyse market trends could help speed up the creation of reports, allowing for a more regular flow of vital financial information to the senior leadership of a company.

Historically, AP data has been siloed, making it difficult for CFOs to access crucial information to aid their decision-making. However, automated solutions can effectively streamline communication between each link in the supply chain, which in turn enables CFOs to analyse AP performance in real-time and empower their strategic planning capabilities. 

AP automation, in particular, enhances strategic insight by instantly delivering information (such as late payment notices) to a simple, accessible interface. From here, AP leaders and CFOs can identify potential bottlenecks in payment processes or spot opportunities to negotiate more favourable terms with vendors. 

Optimising financial health

Crucial CFO responsibilities include managing cash flow effectively, reducing debt, and maximising profits where possible — which means effective budgets. The 2022 PwC study identified around a third of CFOs expect financial planning to increase over the next three years. 

However, 52% of survey respondents also said they were unsatisfied with their technology infrastructure for planning and budgeting activities (for instance, still having to rely on manual data collection). Manual processes can limit the amount of information collected during a project. For example, AP data on outgoing payments can significantly improve the usefulness of a budget document but may be overlooked without automated tools.

Automating AP processes can significantly speed up invoice processing, approvals and payments, enhancing AP leaders’ abilities to ensure all invoices are paid on time and relay that vital information back to the CFO. 

Solutions like Total AP also deliver live invoice status updates to buyers and suppliers, so they can identify where invoices are in the payment process. This, in turn, can help reduce penalty charges for late payments, improve business relationships, and help CFOs increase their company’s overall credit rating. 

Managing risk

Whether it’s financial or operational risk, CFOs need complete visibility of their AP department’s activities to ensure they put the proper measures in place to protect their company’s bottom line. If there are any errors or delays in processing invoices, it can disrupt the entire supply chain and have a negative impact on sales. 

A 2023 global CFO survey found that business leaders are focused on reducing operational risk to maximise profits in the event of a recession. Centralising AP data and automating processes minimise the inherent risks of errors that come with manual paperwork. Further, it can significantly reduce fraud risk. 

This is because AP automation solutions are designed to instantly verify invoice information against a pre-approved set of parameters, such as authorised vendor names, addresses etc. It can also flag duplicate invoices and other potential AP data inconsistencies that may result in supply chain delays or indicate a genuine fraud attempt. You can find out more about preventing invoice fraud in this webinar

Ensuring compliance

As regulations constantly evolve, especially in tech-dominated industries like financial services, CFOs need total reassurance that their finance teams meet compliance obligations. 

Keeping up with compliance updates on an ad hoc basis is complicated and expensive. According to recent estimates, the average US company spends between 1.3% and 3.3% of its total labour costs on regulatory compliance. From 2002 to 2014, these costs increased at a rate of 1% per year. However, Accenture’s 2022 global Compliance Risk Study found that nine out of ten compliance leaders expect compliance costs to increase by 30% within the next 12 months. 

Investing in finance automation, such as e-invoicing solutions, can help shore up aspects of compliance procedures whenever new legislation comes into force. It can also help lower compliance costs overall, as less time and resources are required to check invoices and generate reports for auditing purposes.

Driving cost-efficiencies

Alongside identifying new business opportunities and optimising financial health, CFOs may prioritise implementing company-wide cost-cutting measures. 

For example, they may want to invest in finance automation solutions to save the company time and money on unnecessary admin processes. A 2022 survey found 43% of CFOs had already enhanced their technology stack to drive value and increase organisational efficiencies. 

Moreover, a study from PYMNTS found that 40% of companies that had previously invested in AP automation plan to update and integrate Enterprise Resource Planning (ERP) systems to further streamline AP processes. 

With solutions like Total AP, finance teams can significantly reduce the cost of handling invoices, enabling the CFO to reinvest the money saved into revenue-growing opportunities.

Addressing skills shortages

94% of Chief Financial Officers worldwide believe attracting and retaining talented finance employees is vital. 66% of the same survey respondents also noted labour shortages pose a significant risk to their organisation’s long-term stability. 

Incentivising current staff, enhancing their effectiveness, and reducing personnel costs were identified as key tactics for overcoming staffing challenges in the years ahead. 

In line with this, a 2022 survey by Ardent Partners found that 64% of AP teams cite analytics and business intelligence as the most in-demand skills for AP professionals to foster in the future. Therefore, from a CFO’s perspective, equipping AP teams with the tools they need to maintain data visibility and boost their analytics capabilities will help improve employee performance and morale. 

Additionally, AP automation can go a long way in addressing skills shortages, as minimal human input is required to ensure operations run smoothly. 

Framing your pitch for finance automation investment

When considering your CFO’s priorities, research related facts and figures to help bolster your pitch for AP automation investment. For example: 

  • Reduced costs: Finance automation technologies can reduce processing costs by 40-90% compared with manual AP processing methods.
  • Increased efficiencies: Automated AP software can process invoices 73% faster than companies relying on paper invoicing – the equivalent of just 3.3 days compared with 11.9 days per invoice. This frees AP staff to focus on tasks which can add value to the organisation.
  • Enhanced visibility: AP automation captures Accounts Payable activity in real-time. Access to this kind of real-time financial information can significantly improve decision making for CFOs. 
  • Improved strategic planning: Companies that deploy AP automation are 2.3x more likely to have a strategic multi-year plan for AP growth. 

You can learn more about unlocking AP automation’s benefits in this previous article. Or, take a look at the Ardent Partners’ latest AP Trends and Predictions Report, sponsored by Kofax, for more on future-proofing AP processes in the years ahead.  

Kofax and Tungsten Network’s finance automation solutions can help your CFO meet their goals

As global leaders in AP automation, our Total AP solution can help build finance teams’ credibility by providing CFOs with critical insights that can be reported back to the CEO. 

It integrates seamlessly with your existing business practices and delivers powerful reporting and auditing features to ensure your business fulfills its operational objectives. 

We also partner with PwC to ensure our customers’ e-invoices are compliant, regardless of their industry or markets served.

You can read more about our solutions here or get in touch with us to book a demo.

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