Chief financial officers at smaller more agile UK companies are better able to implement cost savings such as early payments discounts, believes managing director of Barclaycard commercial payments, Marc Pettican.
The study, undertaken by Opinium Research, uncovered that some £6.7bn of £21bn in available early payment discounts is not being secured by firms, highlighting a disparity in the technological innovation required in accounts payable departments.
The research surveyed 500 senior financial decision makers in companies with turnover of £6.5m or more and who do not outsource their accounts payable processes.
But those CFOs more likely to embrace technological innovation and thus with greater access to early payment discounts, do not necessarily come from mega corporates with wads of cash to throw at the problem, according Pettican.
“It’s not necessarily dependent on the size of company turnover, but rather the personality traits of the CFOs,” says Pettican, explaining the distinctions between conformist, resourceful traditionalist, explorer and trailblazer personality types and how it relates to effective corporate cost saving.
Unlike conformists and resourceful traditionalists, explorers and trailblazers are more embracing of experimenting with technology, while the latter is more willing to roll it out at scale and work more efficiently, believes Pettican.
Results by leadership style (excluding UK micro-businesses)
| Leadership style | Average discounts secured per business p.a. (£) | Average overall discounts available per business p.a. (£) | Proportion of discounts per business p.a. taken (%) | Share of overall discounts captured (%) | Proportion of business population (%) |
| Conformists | 68,478 | 130,727 | 52% | 19.2% | 22.6% |
| Resourceful traditionalists | 76,025 | 114,991 | 66% | 30.6% | 30.2% |
| Explorers | 73,876 | 110,137 | 67% | 25.7% | 25.5% |
| Trailblazers | 82,818 | 84,523 | 98% | 24.6% | 21.8% |
Source: Barclaycard & Opinium Research
“The study found that conformists capitalise on 52% of early payment discounts, while trailblazers are capitalising on 98%. Following that logic, the conformists are the guys who have money to splash around because the turnover is much bigger, but so too is the amount of money they’re leaving on the table.
“It’s by and large the smaller company that has fewer legacy systems who will more easily take that trailblazing style,” says Pettican, referencing that this type of CFO is able to take nearly all discounts available to them.
Pettican also suggests that those trailblazers are embracing technologies that can combine procurement and payments, maximise working capital and access early discounts.
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