Too often, AP automation business plans don’t go far enough in taking into account the ways CFOs evaluate projects. The CFO is your customer for selling AP automation and you need to understand his or her needs and concerns and address them accordingly. Regardless of how your proposal is delivered, whether on the back of a napkin or in a formal presentation, here are some points to consider when making your business case.
It is not just ROI. If your project promises an acceptable ROI, of course it will merit consideration. ROI alone will not net you the win. A CFO will evaluate the project based on key factors including:
• On what factors do you base your return stream?
• What is the likelihood your projections are accurate?
Your CFO will want to know how your proposed solution will deliver more invoices worked per processor. “Soft costs” like time savings and better efficiency are a factor but will not win you the business case alone.
So let’s say your CFO has accepted that you will return the investment you are projecting. The next factor he will be concerned with is what will be the return over time. So in AP automation we typically project how many less processors we need to work the same amount of invoices.
• Will all the processor savings be realized on day 1?
• What if invoice volumes increase or decrease?
What is the estimated useful life of the AP automation solution before we need to upgrade. Choosing between Software as a service (SaaS) vs in house purchase vs build our own AP automation solution is a major factor here. Saas is going to include upgrades and be significantly less especially when it comes to upfront cost of investment which translates into a faster ROI.
With so many projects competing for the same investment dollars, how do you grab the attention of your CFO to ensure your project is the chosen one? Focus on justifying your ROI. Be knowledgeable about what other internal project you are up against for the same budget dollars. You need to make your case both believable and compelling. Your CFO will have many options to decide including the potential of doing nothing. By evaluating your ROI the way your CFO will gives you the best chance to get a better return on your own investment of time and effort.