net present value

Net present value, or NPV, is a method of valuing capital projects that uses a predetermined interest rate to determine the present value of an investment's net cash inflows and outflows

- Used in the purchase-to-pay cycle to validate invoices, approvals, and supporting documents.
- Used to strengthen internal controls over purchasing and supplier payments.

- Example: Before payment, the AP team applies **net present value** to confirm the invoice matches the approved purchase documentation.

- Why it matters: Prevents incorrect/duplicate payments, reduces fraud risk, and improves accuracy of payables and expenses.