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How much should Accounts Payable Software for automation cost? Depends on your B2B payments!

Posted by Chris Cosgrove

Mar 28, 2017 5:10:08 PM

The Accounts Payable Software Price is Right!

How much should Accounts Payable Software for automation cost? Depends on your B2B payments!

Well, despite winter’s best efforts to keep its grip on us, it’s finally moving on and thankfully the seasons are changing to warmer and hopefully drier, sunnier days.  So too, is the landscape for Accounts Payable leaders, but the question we want to address today is how much Accounts Payable software for automation should cost?  It turns out it depends on a few factors, not the least of which is your approach.  We delve deeply into that over in this e-book, and if you’ve yet to pursue automation or eInvoicing, we definitely recommend reading up on it first.

But back to the question at hand…

Accounts Payable software can be an expensive proposition especially where process automation is involved.  That is primarily is because of the multiple components that are required to take a high volume, transactional process and enable the lifting, parsing, cleansing, pulling, and pushing of data that mimics how human processing of invoices occurs.  For many companies, the costs to get AP automation up and going is just a bridge too far and the ROI is not compelling enough to enable executives to get behind a go decision and pull the trigger.  This is especially true for smaller companies and almost always when it involves deploying systems locally as opposed to in the cloud.  At least via a cloud approach, some of the obstacles to implementation are removed but another cost consideration, and one which is ongoing, is the necessity of having technical staff administer these newfound systems.  The short of it, for a traditional AP automation approach deployed locally is that the bill you’ll foot to get it off the ground will be well past $100K.  

On the eInvoicing side of things, costs are considerably lower from a startup perspective, but come with their own set of challenges to get going.  The primary issue in this space is the function of vendor outreach and onboarding.  While there may be some providers who alleviate this challenge by helping to evangelize your supplier base about the virtues of eInvoicing, this task typically falls squarely on the shoulders of already busy Accounts Payable staff.  While that might work for your organization, for many it does not given that vendor outreach, and the sales persona that accompanies having to win hearts and minds is not necessarily a shared trait of the predominantly analytical type that is an AP clerk.  So, sometimes the onboarding efforts get bogged down due to this type of constraint and the adoption rates for this approach languish.

Let’s look at this a bit differently!

Now, from our perspective, the lowest hanging fruit for Accounting and finance leaders to pursue in terms of immediate improvements and impacts to their operational and financial health is the movement to monetize payments.  Smarter payments, and those that create a dynamic and sustainable income stream into your business are the primer that can fuel your automation pursuits.  This is because the mechanisms to cash in on your payments stream are typically little to no money up front if you go with the virtual payment route.  We delve into the reasons you should be paying attention to that over here!  From a benchmarking perspective, if you just did back of the napkin calculations and took a third of your annual spend * 1.25% and used the product of that you’d, have an idea of what your annual keep would be.  For many businesses, especially the larger you go, it starts to be a significant number, but in most circumstances it well meets the requisites of getting an automation initiative off the ground.  From a value standpoint, you’re hard pressed, in terms of actual payment methods, to find something that offers anywhere near the value, since every other payment mechanism costs to generate and yields no fiscal return.

So, if you want our answer to what is should  That is, of course, if you follow the order of operations that we talked about here.  Then again, you can go your own way and there are many vendors who will happily charge an arm and a leg to get you efficient, but don’t say we didn’t warn you!


Download The Four Keys To Maximizing The Strategic Value of Accounts Payable


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Topics: accounts payable software, ap automation, b2b payments

B2B Payments - The Tip Of The Spear To Transforming The Accounts Payable Process!

Posted by Chris Cosgrove

Mar 21, 2017 3:34:53 PM

Harness B2B ePayments as the tip of the spear to AP automation!

Let's set the record straight!

The primary reason for writing this post today is to confound traditional thinking in a space that is befuddled by many discordant voices in the market.  For about 99% of the market, the voices competing for attention are focused on one of two agendas: a. Cutting cost and b. Driving efficiency.  While these are great, the sad reality is that for the many would be clients of Accounts Payable automation or other AP improvement initiatives, a significant percentage of them scrap their plans for internal improvement.  The reason that this happens is generally centered around one or two thoughts: a. This costs too much (and we won’t ever see a worthwhile return) or b. I don’t have the people necessary to pull this off.  Either way, in many cases, companies who have set out on the hopeful path to improvement often depart the trail when the going gets a little rough and instead choose to remain mired in the status quo, which as we’ve evidenced here is costly and lackluster.

So let’s define the tip of the spear before we go any farther.  According to it can mean the following:

* At the very center of harm's way (ex: "The Bomb Squad is at the Tip of

the Spear against the Neo-Nazis")

* The cutting/deadly edge (ex: "The new PULVERIZER 3000, will be the Tip

of the Spear in Homeland Defense)

* The leading unit of an attack/engagement (ex: The battleship, USS

Smackdown, will be the Tip of the Spear when we engage the enemies


For the sake of what we’re discussing today we’re going to go with option three.  


From the standpoint of Accounts Payable process improvements, every CFO, Treasurer, Controller, Accounting Director, and VP of Finance who has their hands involved in both the strategic aspects of Accounts Payable and oversight of the operation complexities associated with invoice processing and timely payment executions should take heed to what is about to be said... as in right now.

If you are not monetizing your payment stream you are missing the boat entirely.

This is doubly true if you are one of the businesses that have previously looked at AP automation or eInvoicing solutions and come to the conclusion that the investment to improve your business did not have a significant enough use case to warrant making it.  If you embrace what we’re covering here then you may have immediate cause to reconsider the merits of automation knowing that you may have overlooked a sustainable and sizable stream of cash that has been untapped in your current business.

Through B2B payments, and more specifically virtual card payments, you can monetize your payment stream in a fashion that you may never have.  In fact if you’re paying old school via checks, wire, or ACH, every one of those mechanism costs to execute.  Granted, some cost way more than others, but none of them bring or keep any cash in your organization, so if those are your best and only options then try to minimize the bleeding by pursuing the most efficient methods.  However, if you’re open to forward thinking you can partner with companies who will evangelize the virtual payment method (which is readily accepted at about 25-30% of most B2B enterprises, and growing) and bring new monies into your coffers.


Get a W on the board!

By getting a win and creating momentum in your back office, along with the new cash stream, you can generate enough in rebates to offset even grandiose capital investments that can be leveraged into fancy automation systems, where that was previously impossible.  However, and again this is targeted to the folks who consider themselves smarty-pants, there are better approaches than huge up front capital investment plays to deploying Accounts Payable process improvement technologies.  The gist of what we want to get across to you today is that payment monetization represents the lowest hanging fruit available to you from a monetary and process improvement standpoint.  By garnering the benefits available and the perpetual rebate stream afforded by the cash rebates of virtual payments, you can take hold of your process and then pursue the more prickly initiatives like AP invoice processing transformation or eInvoicing.  Which is a better approach? Well, we go through that here, but suffice it to say that is subjective…

If you haven’t taken the time to evaluate the upside of ePayments, it would behoove you to look at your monetization potential in a new light, and then make determinations about whether that makes sense for your enterprise.

Download The Four Keys To Maximizing The Strategic Value of Accounts Payable

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Topics: Accounts Payable Process, Accounts Payable Automation, accounts payable software, epayments, b2b payments

Leveraging B2B Payments To Drive Value

Posted by Chris Cosgrove

Mar 14, 2017 12:58:46 PM

Pursuing a winning B2B payments strategy is paramount!

Identifying Value Is Key

CFO’s and Controllers the world over are pressed with making difficult decisions for their businesses.  While obviously leading the charge over day to day financial activities within their organization, it’s more of a necessity to be a value contributor to the organization itself, and as such, these fiscal leaders are consistently looked to as a means to create vision and set direction in the mid and long term in an effort to create maximum business value.  These activities can translate from the daily operational load of accounting teams to treasury and risk management strategies to tax and audit duties to many other areas.  One that is continuously evolving and where we’d like to focus our attention on today is the area of B2B payments.

So much is changing so fast in today’s digital economy that it can be difficult to keep pace with emerging technology.  No sooner does a technology get invented and deployed than newer, alternative tech is out there making waves.  It can be very daunting to be a finance leader whose decision making can have far reaching consequences within the business itself immediately and with long term implications.  With that said, we want to focus today on how B2B payments can be harnessed as a value creation mechanism.  The old days of thinking that a payment is a payment and therefore really only a liability to a business are over.  Savvy finance professionals recognize the two-edged nature of payments, which we’ll get into in a moment.

The Two-Edges to B2B Payments

It is accurate that a payment is a liability on the balance sheet, but if that is the only understanding of payments, it’s woefully outdated.  Because payments are often perceived in this fashion they get little fanfare in terms of executive attention, yet they represent one of the most worthy areas of opportunity within the financial back office.  For starters, simply converting existing B2B payment methods from old school approaches like traditional check cutting to more modern wire or ACH transactions yields the immediate benefit of cost slashing.  According to The Accounts Payable Network, the average cost to process a check is $5.14.  Therefore, using that as a multiple, a company that is cutting 1,000 of those a month is spending $5,140 just to get their payments in the mail, which is not even factoring the cost to process the invoice that had to be matched or approved to get it ready to be paid!  Switching to a method like ACH can drop that cost by upwards of 80%.  So, if you’ve yet to even consider the ramifications of that in your business, you owe it to yourself and your company to dig a little deeper and discover what’s possible.  As far as edges are concerned this is really dealing with the cost edge associated with payments, but on the flip side, you have the profit edge, which seems oxymoronic in some ways, but is nonetheless true.

For really forward thinking Finance leaders, you can go waaay beyond cost cutting and move your payables process forward to be a profit generator to your business.  This can be done via updated payment methodology such as in virtual card payments.  Using these single use virtual credit card transactions, which are highly secure, you can pay one or many invoices to a vendor and cash in on the available rebate stream afforded through transaction interchange.  That being said, many more suppliers are willing to accept the merchant fees associated with card transactions as a means to provide their customers with greater payment flexibility and in an effort to bring cash into their businesses faster.  The upshot of this is that you can literally tap into a newfound profit stream in your back office, which is unheard of in most traditional Accounts Payable processes.  As an example, if your average payable is $1,000 and you’re receiving a 1% cash rebate for paying via virtual card, then you’re business is intaking $10 for that transaction instead of paying via check (which are highly susceptible to fraud scenarios) and costing your business $5+.  This is a net swing of $15 per transaction successfully converted to virtual payment methods (and a tidy return if we might add).  Now it would be foolhardy to think you could convert 100% of your payment traffic to this method, but a conservative estimate of 25% of it is well within reach which can mean a solid contribution financially to the health of your business.  Also, many businesses have average invoice amounts much higher than $1,000 per transaction so the gains are scalable relative to your actual spend.

Either way, the monetization of your B2B payments can be the beginning of value creation within your financial back office processes.  Many other efforts to automate or otherwise improve areas like Accounts Payable invoice processing fall flat on their face due to high capital investment costs or other resource constraints.  To our thinking pursuing an ePayments strategy within the confines of your existing B2B payments stream is the ideal way to generate a win for the business from a momentum and a cashflow standpoint.  This type of win can and should get you on the path to winning at AP, which we discuss more over here!


Download The Four Keys To Maximizing The Strategic Value of Accounts Payable

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Topics: Accounts Payable Process, Accounts Payable Automation, epayments, b2b payments

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