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Aligning Finance and Procurement – Aligning CFO and CPO strategies for 2025 success

06/02/2025 By

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For a company to be successful, the CFO and CPO need to work together. Table 1 shows key CFO priorities and how procurement can help meet them. By using data, automation and better processes, procurement can improve financial reporting, cut costs, support budgeting and manage risks. It also plays a big role in ESG goals and building strong supplier relationships. The table includes key actions for procurement and simple KPIs to track progress.

Table 1
CFO-CPO alignment KPIs

CFO initiativesCPO alignment strategies – ActionsProcurement KPIs
Improve financial reporting and analytics:
CFOs are enhancing financial reporting by integrating real-time data and advanced analytics to improve transparency and enable faster decision making.		Use procurement data to provide realized savings, supplier performance and compliance metrics for financial transparency. Enhance FP&A and financial reporting by providing accurate spend data, contract details and insights.1. Spend under management (%). 

2. Realized savings as a % of total spend. 

3. Number of contracts aligned with compliance requirements. 

4. Time to consolidate spend data into financial reports.

5. Error rate in procurement-finance data integration.
Drive cost management and operational efficiency:
CFOs are optimizing cost structures and reducing inefficiencies to balance profitability amidst inflationary pressures and rising costs.		Validate procurement-led cost savings and improve operational workflows to enhance overall efficiency. Enable consistent supplier performance and align cost management efforts with procurement outcomes.1. Realized savings as a percentage of spend.

2. Percentage of cost-saving initiatives tied to measurable procurement activities. 

3. Average time to resolve cost discrepancies.

4. Procurement-driven reductions in operational inefficiencies.
Enhancing budgeting and forecasting processes:
CFOs are prioritizing tools and processes that support more accurate budgeting and forecasting through real-time updates and supplier cost trends.		Deliver supplier cost trends, contract renewals and real-time updates to improve forecasts. Support treasury and FP&A with historical pricing trends and payment schedules for cash flow planning.1. Forecast accuracy for procurement budgets (%).

2. Variance between planned and actual procurement costs (%).

3. Percentage of budget aligned with supplier forecasts.

4. Number of treasury cash flow adjustments driven by procurement data.
Build a scalable data infrastructure:
CFOs are developing robust data infrastructure to support strategic decision making and operational demands.		Standardize supplier and spend data to ensure accuracy of financial accounting, tax compliance and ERP integration. Maintain clean supplier master data for enhanced reporting and analysis.1. Data accuracy for supplier records (%). 

2. Percentage of procurement data automatically reconciled.

3. Audit readiness score for procurement data. 

4. Time to resolve data inconsistencies flagged by finance teams.
Strengthen cash flow management and liquidity:
CFOs are maintaining a critical focus on cash flow management, using real-time dashboards and forecasting tools to ensure liquidity and resilience.		Optimize payment terms, streamline procure-to-pay (P2P) workflows and leverage dynamic discounting to enhance cash flow management and operational resilience.1. Invoices auto-matched in P2P workflows (%).

2. Invoice processing cycle time (days). 

3. Early payment discounts captured (%). 

4. Time to resolve payment errors. 

5. Mismatched invoices resolved automatically (%).
Adopt automation and AI:
CFOs are using AI and automation to streamline processes, such as reconciliations, reporting and data analysis, to enable a focus on strategic activities.		Automate P2P workflows and exception handling to streamline accounts payable and financial reporting processes. Enable treasury and AP to optimize payment term monitoring and discount tracking for improved cash flow.1. Automated workflows in procurement processes (%). 

2. Reduction in manual interventions for P2P tasks.

3. Average time to reconcile procurement-related reporting errors. 

4. Time savings attributed to automation in financial reporting.
Align financial strategies with ESG goals:
CFOs are integrating ESG metrics into financial strategies to meet regulatory and investor demands.		Track supplier compliance with ESG standards and carbon reduction goals. Align procurement with corporate sustainability targets, providing insights to financial accounting and compliance teams.1. ESG-compliant suppliers (%). 

2. Spend with ESG-compliant suppliers (%).

3. Reduction in Scope 3 emissions (metric tons).

4. Number of regulatory ESG disclosures supported by procurement. 

5. Procurement decisions aligned with sustainability metrics (%).
Foster strategic partnerships:
CFOs are collaborating with technology providers and consultants to adopt cutting-edge solutions that enhance digital transformation and decision making.		Collaborate with suppliers and solution providers to enhance procurement-driven value. Align strategic partnerships to improve cost management, innovation and ESG initiatives.1. Number of supplier partnerships contributing to financial goals.

3. Supplier collaboration-driven projects (%). 

4. Procurement savings attributed to collaborative initiatives. 

5. Alignment of supplier-driven innovations with financial goals.
Expand strategic risk management:
CFOs are adopting integrated approaches to address risks from climate, geopolitical and regulatory challenges.		Mitigate supply chain and supplier risks by leveraging advanced analytics and compliance tools. Ensure procurement strategies align with broader risk mitigation frameworks.1. Number of procurement-driven risk mitigation activities.

2. Supplier risk scores (%).

3. Percentage of suppliers with compliance issues resolved. 

4. Financial impact of procurement-related risk reduction activities.
* The CFO initiatives are derived from a combination of Spend Matters research and publicly available insights from leading consulting and analyst firms.

Visit our  ‘Aligning Finance and Procurement’ in-depth guide for practical, structured advice on enhancing finance-procurement alignment.

More in this series:

Read also our use case scenario ‘Aligning Finance and Procurement for cash flow and liguidity.’

Topics
Finance and Procurement Alignment
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