The client is a leading global chemicals manufacturer with more than 200 different payment terms, ranging from NET0 to NET150 with some based on specific dates in a month. The client saw the potential in optimizing payment terms, but the volume and complexity of data made it nearly impossible to do this quickly and efficiently.
Using PaymentTermOptimizationAi, ElectrifAi showed the client the potential to streamline their payment processes, unlocking significant savings opportunities and boosting greater financial stability and success. Our analysis revealed that 8%-9% of spend lacked payment terms stated on the PO, and 3% to 5% of spend included a payment term offering early payment discounts of up to 5%. Several long-duration payment terms were identified as potential candidates to negotiate early payment discounts. The solution showed how the client could realize immediate savings and work towards standardizing terms with key suppliers.