Accounts Payable
Accounts payable (AP) is the amount of money a business owes suppliers and is an essential part of working capital. If you optimize accounts payable, the aim is to extend the credit period until the payment of supplier invoices. ​
There are different approaches you can take in optimizing your accounts payable: optimization of payment processes, such as payment run frequency or discounts for early or on-time payments; optimization of the own payment behavior through, for instance, avoidance of early payments; or optimization of payment master terms and application of these master terms. One of the critical factors in optimizing accounts payable is a good relationship with suppliers, as it may get you a more extended period to pay bills.
On demand webinar:
How to tackle your working capital
In the last few months, we have seen how important liquidity is: as the COVID-19 crisis hit, a threat to the survival of many companies surfaced within the first few weeks. More than ever, this shows the importance of working capital management as an existential element to the financial health of your business. Watch our on-demand webinar on working capital optimization.
Does this sound familiar?
Due to process inefficiencies, I often miss drawing offered discounts.
We are missing policies allow an efficient payment approval.
We know who our important suppliers are, based on experienced but not on facts. This impacts our position in negotiating payment terms.
Our cash balance is not sufficient to make payments, resulting in increased external financing need.
I have so many different payment terms agreed with my suppliers, leading to tremendous process inefficiencies in managing our accounts payable.
We rely too heavily on error-prone manual processes to approve requisitions, scan supplier invoices, and issue payments.
Issues in Accounts Payables we encounter often.
Does this sound familiar?
- Due to process inefficiencies, I often miss drawing offered discounts.
- We know who our important suppliers are, based on experienced but not on facts. This impacts our position in negotiating payment terms.
- I have so many different payment terms agreed with my suppliers, leading to tremendous process inefficiencies in managing our accounts payable.
- We are missing policies allow an efficient payment approval.
- Our cash balance is not sufficient to make payments, resulting in increased external financing need.
- We rely too heavily on error-prone manual processes to approve requisitions, scan supplier invoices, and issue payments.
Benefits
Up to 40% increase in accounts payable productivity
Up to 75% reduced accounts payable process time
Increased on-time payments and eliminated paying of duplicate invoices
Increased efficiency in supplier management through segmentation and improved collaboration
Up to 5% EBIT increase through better payment terms
How it works
With AIO Insights, we create the required transparency to reveal areas of improvement, highlighting specific observations in payment terms application, process inefficiencies, and supplier segments.​
With AIO Intelligence, we evaluate improvement concepts using advanced algorithms that enable optimization of accounts payable through supplier segmentation and evaluation of payables scenarios, such as payment frequency optimization.​
With AIO Impact, we initiate, execute and monitor short- to long-term improvement measures that leverage a library packed with best practices, tracking the implementation progress on, for instance, the SKU, supplier, or invoice level.​
In addition to our AIO platform, we offer managed consulting services to optimize your purchase-to-pay process.
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