The DPO Problem: Cash Out Too Fast, Visibility Too Low
The company had:
- 15-day invoice approval cycles
- Inconsistent payment terms with over 400 vendors
- No visibility into entity-level cash flow
Manual workflows meant finance often paid early just to avoid late fees. Worse, they couldn’t forecast outgoing cash with confidence.
What Changed: Automation + Approval Policy
They implemented AP automation with:
- 3-way matching (PO, invoice, receipt)
- Automated invoice intake (OCR + email parsing)
- Rule-based approval flows (e.g., auto-approve < $1K if matched)
- Scheduled payment batches tied to DPO targets
The system allowed them to align approvals with policy, not panic.
Results: Real Benchmarks from the Project
Here’s what changed within 6 months of automation:
Strategic Implications
Cutting DPO improved more than cash position:
- The Treasury could schedule payments precisely, improving yield.
- Vendor relationships improved with predictable pay cycles.
- CFO gained real-time visibility into liabilities by entity and currency.
This transformed AP from a back-office processor to a lever for liquidity and control.
ROI Benchmarks You Can Use
If your company has $30M in annual payables:
- 20-day DPO improvement = ~$1.64M in freed working capital
- Early pay discounts = $600K+ saved annually (assuming 2% terms on 50% of spend)
- Invoice processing savings = 70% reduction, or ~$300K saved
You don’t have to wait months to realize DPO gains.
With the right automation, even mid-sized teams can reduce payment friction, enforce policy-based approvals, and unlock millions in liquidity.
Book a Demo
See how Finofo can help you cut your DPO, improve controls, and forecast payables with precision.
