Even as the economy shows signs of stabilizing and corporate finance execs feel a little freer to breathe a (small) sigh of relief, they remain focused on cash inflows and outflows. Indeed, corporate cash balances within the S&P 500 have risen steadily over the past year and a half, so that they’re now nearing $1 trillion.

To get there, many companies have focused on the basic blocking-and-tackling of cash management – consolidating cash balances, gaining visibility into the location(s) of their funds, and paying greater attention to early pay discounts, among other strategies. Ariba, a provider of collaborative business commerce solutions, has seen a 48 percent spike in the number of early payments between the buyers and suppliers that do business through its network, along with a jump of 73 percent in the dollar value of discounts. “We’re seeing increased scrutiny of cash in the supply chain,” says Peter Lugli, senior director of working capital management with the Sunnyvale, Cal.-based firm.

One example comes from NSG Group, a $8 billion manufacturer of glass and glazing products headquartered in the United Kingdom. Among other efforts, a team has been working for the past 18 months to streamline the company’s P2P (purchase-to-pay) process. “Like many businesses, we’re very sensitive to cash,” says John Wilgar, global procurement manager.

Currently, the purchase-to-pay process is an amalgamation of the paper invoices that arrive daily from most suppliers, as well as EDI transactions that are conducted with a handful of vendors that supply product on a regular basis. Paper-based processes are, of course, time-consuming and prone to error. In fact, it can take several weeks for a paper invoice to get into NSG’s system, by which time the opportunity to take a discount often has evaporated. EDI is primarily reserved for high-volume suppliers, as it’s time-consuming to set up, Wilgar notes. NSG also is looking for greater visibility into its upcoming payables and would like to rationalize its supplier base.

With these goals in mind, NSG has been working with Ariba to implement a P2P system that is more automated and efficient when it comes to both enrolling suppliers and paying invoices. The new application currently is slated to go live in the fall, when it will launch in Germany, the UK, Italy, and Poland. Together, these countries account for 80 percent of NSG’s European sales.

A main goal of the new system is to enable NSG to take greater advantage of early payment discounts. “We believe that we have significant opportunity to improve discounting,” Wilgar says.

By making greater use of early-pay discounts, most companies can cut between $1 and $3 million for each $1 billion they spend, says Lugli. What’s more, NSG has plenty of company when it comes to its focus on its P2P efforts and the overall cash management process. Ariba has seen a 62 percent jump in the number of its working capital management customers this year.

Even as the economy steadies itself, corporate CFOs and treasurers appear to be keeping in mind the tight times they’ve recently survived. Cash remains king, and companies are doing all they can to protect it, Lugli notes. ###