San Francisco, Ca. Current low interest rates are forcing CFOs and enterprise finance departments to work harder and seek more innovative ways to drive greater returns to satisfy working capital needs. This new cash management imperative is ushering in new disruptive approaches to transform Accounts Payable functions from cost centers to profit centers by unlocking hidden value, unleashing new and significant revenue streams.
Today, technology is revolutionizing the procure-to-pay process, providing the requisite velocity and transparency to support dynamic discounting—where suppliers proactively offer early payment discounts on approved invoices awaiting payment.
“While dynamic discounting has been in existence for several years, today it’s fast becoming one of the key tools of today’s new breed of innovative CFOs who are discarding the traditional practice of holding onto cash and delaying payments, which has proven to deliver inadequate returns in today’s fast-moving and demanding economy,” said Nilay Banker, founder and CEO of Inspyrus, which offers the only fully integrated AP automation solution on the market today, that enables invoice automation, discount management and supplier enablement – all from a single application. “Leading organizations are leveraging dynamic discounting to forge ahead with disruptive approaches that make early-pay discounts a real source of cash — capturing up to 2% of corporate spend directly back the bottom line and optimizing cash management in real-time.
“While dynamic discounting can provide significant competitive advantage, unfortunately it remains out of reach for too many organizations today. According to the “2016 AP & Working Capital Report” by PayStream Advisors, only 65 percent of AP professionals surveyed said they “sometimes” are able to capture early payment discounts, and only 6 percent said they use dynamic discount management to achieve discounts or rebates.
The report goes on to explain the reasons dynamic discounting remains elusive: “As treasurers work to manage their organization’s cash flow, many are focusing on back-office departments like Accounts Payable to gain internal savings. In AP, treasurers try to strategically manage supplier payments so that invoices are paid on time and the department can capture early payment discounts. Unfortunately, for companies with manual AP processes, long invoice cycle times and frequent late payments often make this an unrealistic goal. Innovative organizations recognize the importance of leveraging working capital tools with AP automation to optimize cash flow and increase savings.”
“Despite enormous opportunities for savings, most organizations do not consider dynamic discount capture a priority; as a result, CFOs following traditional cash management practices are losing out on capturing millions in extra revenues,” said Jimmy LeFever, director, Research and Consulting, PayStream Advisors. “Our data shows that companies successfully instituting a dynamic discounting program consistently net early-pay discount returns that significantly outperform comparative laggard approaches. In the current low interest rate environment, progressive CFOs will look to boost supplier participation in discounting initiatives as a savvy cash management strategy.”
Inspyrus offers the most innovative and comprehensive discount management solution on the market. Inspyrus uniquely offers Total Discounting, which combines the best of traditional and dynamic discounting approaches along with invoice automation and a self-service supplier portal, allowing organizations to dramatically increase early-pay discounts and supplier adoption, as well as eliminate missed discounts.
Inspyrus is a Silicon Valley Fintech solutions and software development company that specializes in transforming Accounts Payable and Finance Operations into profit centers. As an Oracle preferred solution partner for Accounts Payable automation, Inspyrus provides solutions for Invoice Automation, Dynamic Discounting, and Supplier Enablement. Supported by several patent-pending technologies, Inspyrus provides out-of-the-box, real-time integration with leading ERP systems, including Oracle’s E-Business, JD Edwards, Peoplesoft and Fusion Applications, as well as SAP and IBM. Our solutions are used by some of the most esteemed brands and leading-edge companies in the world, across various industries, ERP systems, and geographies — with production environments ranging from 2,500 invoices/month to over 250,000 invoices/month, across 30+ countries and 18+ languages. To find out more visit: www.inspyrus.com.