As a CFO, optimizing your payments, expenses, and overall accounts payable function is crucial for the success of your organization. By streamlining these processes, you can increase efficiency, reduce costs, and improve cash flow.
Here are some recommendations to consider when optimizing your payments, expenses, and accounts payable function
- Capitalize on Credit Cards: One of the simplest ways to optimize expenses is to establish company-wide policies around credit card use. Encourage the use of company credit cards for all business expenses, and make sure that employees understand which expenses are eligible for reimbursement. By consolidating expenses into a single payment method, you can easily track spending and reduce the risk of fraudulent transactions.
- Embrace Expense Management: Managing expenses can be complicated, but advances in technology have made it easier. Utilize expense management tools that offer real-time visibility on approvals, balances, and budgets. Expense management tools will help to minimize out-of-pocket expenses, avoid compliance issues, and steer clear of any discrepancies.
- Streamline Bill Payment: Switching to electronic payments will save on printing, postage, and check-processing costs. Electronic Payment and Invoice automation also provide additional benefits like reducing payment timeframes across vendor types. Also, consider consolidating invoices by vendor or service rather than processing each individual invoice separately.
- Centralize Sourcing and Procurement: In order for procurement to be successful, it is essential to have a centralized procurement team or technology that can efficiently manage the procurement of high-value items. Opt for sourcing strategies that can help cut costs, minimize inventory, and reduce vendor management. With purchasing powering your procurement, sourcing will be able to focus more effectively on the negotiation of contracts including payment terms, pricing, and service level agreements.
- Prioritize Reimbursements: Make sure to benchmark your reimbursement policies to match industry standards and adjust them to be competitive. Create a reimbursement-friendly policy and set accurate timelines for submittal and disbursements. This will go a long way in ensuring that employees receive timely reimbursements and minimize the need to “loan” their own personal finances to the company.
By following these steps, CFOs can optimize their payments, expenses, and overall accounts payable function, resulting in reduced costs, improved cash flow, and a more efficient organization.
