In today’s competitive business environment, every dollar counts. For finance teams, finding ways to optimize cash flow and reduce costs is crucial. But what if your Accounts Payable function could actually generate income? With Centime, this is not just a possibility but a reality.
The missed opportunity in AP:
Most AP bank accounts are non-interest-bearing, meaning valuable funds sit idle without generating any income. This is a missed opportunity for many businesses. Traditional AP processes focus on managing vendor payments efficiently, but they often overlook the potential for generating financial returns on the funds held in AP accounts.
Centime solution:
Centime offers a groundbreaking solution: an AP bank account that earns interest on deposits. By simply maintaining a target balance, businesses can turn their AP function into a profit center. This innovative approach allows businesses to leverage their existing vendor payments to generate additional income, offsetting costs and boosting working capital.
Example calculation:
Let’s consider a business with an annual AP volume of 900 invoices and an estimated AP spend of $3.6 million. By maintaining $300,000 in the AP bank account, the business can earn $12,750 annually at a 4.25% interest rate. This not only covers the $4,500 Centime AP subscription cost for this volume of invoices but also provides a net gain of $8,250.
Here’s the breakdown:
Annual AP volume: 900 invoices
Average payment per invoice: $4,000
Annual AP Spend: $3.6 million
Monthly AP bank account balance: $300,000
Interest rate: 4.25% APY*
Annual Interest Earnings: $12,750
Centime Annual AP Subscription Cost: $4,500
Net Gain: $8,250
Benefits:
By adopting Centime, businesses can:
- Earn interest on AP float: Transform idle funds into a source of income.
- Offset the cost of AP subscription: Use interest earnings to cover Centime AP subscription costs, effectively making the software free.
- Transform your AP into a profit center: Enjoy a best-of-breed AP automation solution at no cost and generate a new revenue stream.
Ready to turn your AP function into a profit center? Schedule a meeting with our team to learn more about Centime and how we can transform your finance operations today.
