Companies are being hit hard by the uncertain economic situation. Among other things, the tight labor market, high inflation, unreliable supply chains and geopolitical tensions worry CFOs, according to Deloitte's CFO Survey. Reducing costs is therefore high on the agenda of the majority of CFOs in the coming period.
CFOs face the difficult challenge of steering their organizations through this volatile economy. That raises concerns that affect what is on the managerial agendas.
Caution is key
Indeed, CFOs' expectations appear to be becoming increasingly gloomy, Deloitte reports after surveying some 1,100 European CFOs. Just over half (53 percent) of those surveyed have a negative sentiment. Caution therefore seems to be the key word for financial strategy.
The strategic focus for most companies (64 percent) is on organic growth. Looking at the specifics, it appears that CFOs are primarily focused on expanding market share in existing markets (68 percent).
Attracting and retaining new talent is a major pillar for CFOs (72 percent). Cost reduction is also high on the agenda. A large majority (69 percent) of CFOs indicate in the Deloitte survey that cost reduction will be a priority over the next 12 months.
Order costs nearly halved
One aspect where a lot of gains can be made when it comes to reducing costs is the purchase-to-pay process.TU Delft, for example, has almost halved its ordering costs by designing the procurement process more intelligently. This concerns all costs involved in processing a purchase order: from preparing a request to handling the invoice based on the purchase order.
Whereas before these averaged 100 euros per order, they have decreased to 55 euros per order.
There are several ways a smarter and automated purchase-to-pay process can reduce your costs. First, a well-designed procurement process helps get more spend under management.
This provides greater control over expenses by purchasing from regular suppliers on favorable terms (such as a hefty discount).
Saving time (and therefore money)
In addition, automation of the p2p process reduces operational costs. This is because invoices no longer need to be received, coded, validated and approved manually.
This saves a lot of employee time, which is not only beneficial in terms of costs, but also provides a solution against the tight labor market that CFOs are so concerned about, according to Deloitte. After all, the freed up time can be spent differently, to pick up other work that they would otherwise not have gotten around to.
With Lean Six Sigma , you will discover where there are gains to be made in your purchase to pay process. By using this proven method to analyze the existing processes, it becomes visible where exactly the waste is.
Want to learn more about how setting up the purchase-to-pay process smarter and automatically can reduce costs?
or view webinar purchase to pay automation: optimize first then automate