The Insider’s Guide To Improving Payments And Cash Flow: Growing Your Program

Alan Cohen and Scott Pezza

Part 12 and final blog of the Payments and Cash Flow Series.

You’re up and running, with suppliers coming on board and financial benefits beginning to roll in – but you’re not resting on your laurels. Instead, always focus on future growth.

Here are four steps you can take to drive even greater results:

  • Address previously excluded spending and suppliers. In payment or working capital programs where you need to engage and collaborate with suppliers, you will typically work with suppliers in batches. Similarly, you may begin outreach to groups that are traditionally more accepting of your goals. For example, supplier categories like janitorial services, facilities maintenance providers, and MRO (maintenance, repair, & operations) suppliers historically accept discount terms more often than others. Just because certain supplier categories are out of scope to begin with doesn’t mean they should be excluded permanently.
  • Revisit suppliers that declined or had existing contracts. A supplier with a net 30 contract may be less likely to see the value of early payment than a supplier recently moved to net 90. Track existing contracts and declines, following up three to six months later when the perceived benefit of getting paid on day 10 may be much greater.
  • Reengage with suppliers that extended terms but were not interested in earlier payment. Like the last group, some suppliers may accept a move to net 90 without seeing an immediate need for early payment. When you revisit them later, circumstances may very well be different.
  • Incorporate net new suppliers from day one. Any standard net term that you implement during outreach should be applied not just in this program, but to all net-new suppliers as well. The same goes for the set of defined discount terms that you offer during outreach. Make these available up front to new suppliers and grow your working capital savings from another angle.

Call to action

Work with your provider to plan ahead. You should always be looking for new avenues of program growth. The right time to conduct analysis and plan for the next wave isn’t when the current outreach is complete; it should happen in parallel. This ensures a smooth transition between phases with minimal downtime.

Gather feedback on expanding the scope of the program. The execution phase of each wave gives you the opportunity to hear from suppliers about what is attractive and what is not. Use this insight to inform future waves – and to address issues you’ve uncovered before they pop up again. If you’ve kept your sponsor and executive management informed about program success, you may uncover an opportunity to expand the program to new supplier groups, spend categories, or geographies that were not initially in scope.

How we can help

To help you plan for program growth, we offer a sample wave planning and analysis worksheet that shows how you might implement a prioritization approach and timeline for supplier outreach and onboarding. You can request it by sending an email to SAP_improve-cashflow@sap.com.

Complimentary e-book

You can also get our complimentary Insider’s Guide to Improving Payments and Cash Flow e-book. You’ll learn how to build a business case for improving payment processing and cash flow management, and determine core requirements for a successful program that will deliver measurable value to your organization.

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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.