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 www.techwhr-l.com 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.