The Insider’s Guide To Improving Payments And Cash Flow: Commit To Success

Alan Cohen and Scott Pezza

Part 1 of the Payments and Cash Flow Series

The first topic we will address in this 12-part series is the importance of organizational will and alignment. Whether you are just starting a payment or cash-flow improvement initiative, in the middle of deployment, or scaling an existing program, organizational will and alignment are vital to success.

Organizational will can be summed up in three parts:

Commitment to success. Your leadership must never accept the status quo and must always be willing to collaborate with stakeholders from various lines of business to transform “old school” processes and thinking to promote better business outcomes. Effective collaboration requires enterprise-wide commitment across procurement, treasury, and shared services.

Defined goals. There needs to be a clear mandate of how success is measured over a specific period. This could mean an increase in the number of payments automated, suppliers participating, cash flow gained, discounts earned, or other quantitative metrics.

Clear prioritization. Your payments or cash flow initiative must rise above the fray as an umbrella priority that is not limited by competing objectives or hampered by disparate key performance indicators (KPIs).

Organizational alignment requires procurement, treasury, and shared services to break out of their silos. To be truly successful, you must:

Secure a CFO mandate.
In most cases, the corporate functions mentioned above report to the CFO. While the best-case scenario is to have these leaders align, it may be necessary for the CFO to set and communicate clear business objectives for the company, and align leadership stakeholders when determining how objectives will be achieved.

Align KPIs across groups.
If procurement is measured on price reduction, shared services are measured on efficiency, and treasury is measured on discounts earned, your organization is not working toward a cohesive payments and cash flow strategy. Moving these groups to common, shared metrics like economic value added (with price reductions and discounts earned given equal credit) will ensure that teams are aligned and your initiative is set up for success.

Identify a strong project lead. Your project can succeed or fail based on the person leading it. With that in mind, your project lead should have credibility within the organization, institutional knowledge of company operations, existing internal cross-functional relationships, and the ability to build relationships and trust.

Put it in writing

No matter where you are in your payment processing and cash-flow management journey, leaders in procurement, treasury, and shared services must write down their goals and timelines and compare them to the goals set out by your CFO. If they are aligned (or even close to it), you are on the right track. If not, everyone must immediately come to the table to understand where the groups differ and how they can support a common goal.

How we can help

To help you get started, we offer a meeting agenda and template that highlights the advantages of better payment processing and cash flow management for your company and each of its stakeholders. It also offers recommendations on how to get aligned. To request these resources, send an email to SAP_improve-cashflow@sap.com.

Click here for more information about payments and cash flow solutions from SAP Ariba.

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Alan Cohen

About Alan Cohen

Alan Cohen is VP Payments & Financing Strategy, SAP Ariba. Alan has over 20 years of payments and working capital experience as a practitioner, consultant, and banker. In his current role, he leads the payments and financing strategy for SAP Ariba to help clients achieve improved business outcomes. Previously, at Coca-Cola Enterprises, Alan led the procure-to-pay transformation that encompassed sourcing, procurement, and payables automation, and the company became one of the first to benefit from dynamic discounting. Alan holds a supply chain management degree from Arizona State University. In 2015, he was part of a team that won SAP’s Hasso Plattner Founders Award for an innovative approach to B2B payments. Alan lives in Atlanta with his wife and 2 daughters. He has served on the board of the Weinstein School since 2007 and actively participates in 2nd Helpings, a nonprofit to rescue and deliver surplus food.

Scott Pezza

About Scott Pezza

As part of SAP Ariba's Digital Transformation Organization's Center of Excellence, Scott researches, compiles, and shares best-practice information to help SAP Ariba's customers get the most out of their investments. He has a dual focus on the emerging technologies (AI/ML, IoT, Blockchain, etc.) across the source-to-settle cycle, as well as a specific interest in the financial supply chain (invoice management, payments, discounting, and supply chain finance). His research helps inform strategic planning, performance measurement, and program execution. He has spent the past 17 years in the B2B technology space, in roles ranging from software development and support to research and consulting. Scott earned his BA in English and Philosophy from Clark University, his MBA from Boston University Graduate School of Management, and his JD from Boston University School of Law, where he served on the Executive Board of the Annual Review of Banking and Financial Law.