The CFO’s Part in E-invoicing
While sitting next to a gentleman on a flight recently, I inquired what he did for a living. He said that he was the CFO of a large organization. I asked him if they were doing electronic invoicing and he said no. He said that he had many other responsibilities that took up a lot more of his time.
Then I asked the CFO, who in your company would be interested in electronic invoicing? He said that he was sure that the AP manager was interested and that she would be the one to speak with in his organization. Trying not to be overly inquisitive, I posed the question, if the AP manager wanted to switch to electronic invoicing, would she have the ability to implement that change in his organization? He thought about it for a moment and said no she would not be able to do so.
I found this to be a very interesting conversation. When discussing E-invoicing, most CFOs are interested in how AP Automation can improve their inefficiencies. Once they are on board they are usually the ones who ultimately have the final say regarding a new application that can affect so many in their organization.
This brings up the major dilemma concerning electronic invoicing. It’s great for an organization, but it’s usually not a top priority for a CFO. I asked him if his organization could use a reduction in their overall spend, immediately he said of course. Expounding on the virtues of electronic invoicing and how invoices can be approved rapidly, I explained suppliers can get paid early for a discount, he asked how that would work. I told him that as soon as an invoice is approved, an email goes out to the vendor letting them know that they could get paid early in exchange for a discount. This discussion on Dynamic Discounting really got his attention, but it took a long time to get there. Fortunately I had him as a captive audience or I never would have been able to get him to that awareness level. The good news is that I travel a lot, so I do have these types of opportunities quite frequently.
But wouldn’t it be great if CFOs could get to that realization at an earlier stage. They are usually in charge of improving the company’s net profit or loss. E-invoicing/AP Automation is an efficient way for them to get those types of results. I am not saying that CFOs should drop everything they are doing and start investigating electronic invoicing. But what I am saying is instead of having their subordinates do all the heavy lifting, trying to figure out what would work, have the CFO play more of a part to champion the cause sooner. Thus with their added efforts they could maximize their organizations endeavors with better results.