American Electric Power Procure-to-Pay Optimization with SAP Ariba Payables
Case study showing how AEP used SAP Ariba Payables to capture early-payment discounts, extend DPO, and fund a larger P2P automation program.
American Electric Power, a major U.S. utility, implemented the discounting capability in SAP Ariba Payables to standardize payment terms and pursue early-payment discounts. The initiative consolidated 150 payment terms into four, extended days payable outstanding by two days, and generated substantial discount savings in the first year. These savings are being reinvested to fund a broader procure-to-pay automation program.
Captured early-payment discounts averaging 1.5 percent through Ariba Payables discounting
Extended DPO by two days, reducing interest expense on accounts payable
Reduced payment terms from 150 to four standardized options
Used discount savings to fund a larger procure-to-pay automation initiative
Deployed discounting independently of PO-invoice automation solutions
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