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5 Ways Integrated Payables Will Maximize Accounts Payable Value

Posted by Chris Cosgrove

Oct 7, 2019 12:39:20 PM

Optimize Accounts Payable Value Through Integrated Payables


Businesses look for value where they can find it and rightly so.


This drives internal improvements and causes organizations to reinvent and stay healthy.  Those who don’t innovate, change, and adapt, ultimately die. Today, we want to unpack an area of high value that many companies have yet to fully exploit in their financial back office.  The concept is integrated payables and is a relatively new one that exists in the back end of the accounts payable process, specifically payments. It’s also an area that hasn’t seen disruption for many years.  In the US, payments have plodded along, still dominated by antiquated approaches like physical check. Some estimate as late as 2016 still ascribe nearly 51% of commercial payments to checks.  


This is improved from years past where checks and wire were really the only ways to pay, but with the advent of ACH and credit card based payments, checks have been on a steady decline, yet they still exist and with substantial usage.




Because in short, it’s easy to continue to use something that still, despite its flaws, works.


Checks get the job done for many businesses, though they do present some downsides.

The primary reason to segue away from check usage in the b2b payments landscape is because they cost a fair amount to produce (per The Accounts Payable Network, $5.14 / check on average) to process, cut, and mail.  That adds up, especially if you’re cranking out a high volume of them.

The second reason checks are a nightmare is because of the time it takes to mail and then cash them.  If you were to boil it down it all comes back to a lack of efficiency


Now, because of the inefficiencies of the check and the advent of alternative types of payment you have many companies across the world that are paying with multiple payment methodologies, which means one word...complexity.


This is essentially where integrated payables comes into play.


The concept is simple. Take a single payment output file and have it seamlessly execute the various, disparate payment methodologies in one fell stroke.  At a high level the advantages are obvious...not having to manage multiple different payment files or runs and the time associated with preparing and executing those payments.  From that point you have the cost considerations that arise from inefficient payments. Wires and checks are the leading culprits here, and if you can convert that spend into more favorable methods like ACH or even virtual credit card, then you have a recipe for significant enhancement of controls, payment speed, and corporate profitability, which are all great things.


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


So, if you’re still unsure of the claims of integrated payables, let’s take a quick dive into the five primary ways they will maximize the value of your Accounts Payable process!


In short order they are:

Payment Options - As stated above integrated payables means one singular payment file can incorporate any of the following payment types - check, wire, ACH (EFT), and virtual credit cards.  (If you’re not sure about what virtual cards and the hype on them, check this out).  The takeaway  is that you can manage a host of options with simplicity and ease.  That’s always a good thing.


It’s Bank Agnostic - In other words, you can execute an integrated payables approach regardless of whom you’re banking with today.  We understand that banking needs change from business to business based on a variety of fluctuating criteria. As such, because of the agile approach solid integrated payables partners take, the bank you use is a moot point as the payment network and platform exists above the banking layer, meaning you can plug and play any bank into the solution.  This is great so that you can make the changes you need as your business grows and never skip a beat.


Easy Integration - One of the ways integrated payables is made super simple is through a straightforward file based integration methodology.  Rather than relying upon old school approaches and legacy tech, you can have confidence that this approach is repeatable, scalable, and dependable.  It’s the primary reason you can bank agnostically too, because accurately communicating the payment requests and disbursements is facilitated through standardized file connectivity.


Time & Cost Savings - Making payments strategically (with an eye towards electronic means) means that you waste far less time executing check runs, printing, posting, and mailing.  Getting better insight and visibility into payments also cuts down time wasted in administering the process and keeps you focused on the task at hand, not keeping plates spinning.  All of this translates to cost savings as you ditch expensive methods for affordable and more efficient payment types.


Monetization – Perhaps one of the most appealing features of an integrated payables approach is the notion that your money (corporate payables) can actually be leveraged to make you money (earned rebates).  This concept is widely understood at a personal finance level and has growing adoption in the B2B arena. The takeaway here is that a growing cadre of businesses accept virtual credit cards as a legitimate form of payments for commercial transactions.  Although this type of spend assumes the accepting merchant incurs a transaction fee, the reason they do this is to ameliorate their supplier base by providing multiple, flexible options for payment. Also, many businesses leverage corporate credit cards in their travel and expense, P-card requisitioning, and other areas and find themselves in a bit of a moral conundrum when they are willing to leverage the purchase flexibility of card without necessarily being willing to accept cards for payment.  This trend is changing however, with more businesses being willing to both pay and receive payment via card.


One final point on the power and scope of card payments is that they can truly be a source of transformation for AP as a whole and can actually have the net effect of converting AP from a cost center to a profit center, which even a couple years back was a non-reality.


Additional Considerations With Respect to Integrated Payables

Additional thoughts when it comes to integrated payables:


  •     For starters, if this an approach you’re interested in pursuing, it’s going to necessitate the selection of a vendor partner that can actually deliver on the promise of simplifying your payment stream across multiple payment modalities.  For example, if you are presently running 10% of your payments as check spend (regardless of the quantity, though certainly a compounding issue as the transactional counts rise) and this is not a metric you can shift into any other dynamic, automated, electronic category, then they’re going to need to have the wherewithal to handle cutting checks and the postage in an outsourced fashion as a means to fulfilling the overarching goal of responsibly addressing the disparate payment needs and methods contained within the integrated payment file you’re processing. In short, if they can’t execute all the payment types required by your unique vendor preferences then you’re not really talking about integrated payables.


  •     Another consideration on the integrated payables front is whether the process can be integrated into your front end invoice processing.  For companies that have not pursued a broader based accounts payable automation initiative (see more on that here), you will basically invoke the launch the payment file when you batch your invoices that have been posted to your accounting system.  Then when the posted transactions get batched you create the standardized output file that invokes the integrated payables execution.  


However, an alternative that may represent a higher degree of value, sophistication, and automation would be to  connect the up front components of invoice processing to incorporate the launch of payments via integrated payables.  In other words, if you’re leveraging things like automated electronic workflow, with a set of business rules governing invoice escalation through your business’ approval matrix, then upon having the invoice formally approved by the final process stakeholder, you can automatically set the system to invoke the integrated payables trigger without having to wait for it to generate as a result of the accounting system batching process.  In other words, the two, inter-related functions of approving the invoice and actually triggering the payment can be dynamically linked between two disparate systems, which is cool. It speeds up the process and begins to leverage efficiencies through the seamless connection of data across platforms. These things actually matter of course in environments that are burdened or where you have a high transactional volume of invoices that you’re dealing with.

  •     Understand that when you pursue an integrated payables approach there are numerous upsides.  Certainly the cost factors, processing times, visibility, enhancement of controls, and monetization are key.  With that said, even if you had every possible advantage in the world to the latest and greatest of payment options, you may still have intransigent vendors that will not accommodate your latest new whirligig.  In other words, some people / companies won’t change and couldn’t care less about your strategy. Therefore, it’s important to maintain some common sense when you launch out with this initiative. From our perspective you want to keep one eye on the strategic goal…make as many payments as possible streamlined, electronic, and efficient.  Convert the vendors that you can to these means and default the hold outs to whatever negotiated payment terms you have in place. Some things won’t change, and that’s ok. Simply focus on the ones that will where you can generate real value for your loyalty and business and shift and monetize those opportunities. Don’t get bogged down on the ones that got away…instead take the wins where you can and move on!


  •     This may be a bit of a particular, but from our perspective it is something we do hear repeatedly when discussing changing how payments are done.  One advantage of checks, though whether it’s a significant advantage is a prescient question. Some finance leaders like the additional time period afforded to them by the delay it normally takes to process check payments.  We think this is more of an inbuilt comfort level of knowing that the corporate coffers have a bit of a buffer before funds necessary to underwrite checks clear, but to each his own. The bottom line is that pay early or pay late, either way you’re going to pay.  Unless you’ve got some kind of structured money market instrument with your banking or credit institutions chances are the returns you’re going to be getting on your check float are at best going to be nominal. Granted, cash rebates earned on relevant virtual credit card spend aren’t going to be something you get rich on, but the point is they will be newfound monies you didn’t have access to before, and that is always a win for the books.


In closing this out, we know this was a bit more of a walk through of the value points of integrated payables, but if it’s an idea you’re hearing more about of late, that’s because it’s gaining in popularity.  The question is if you’re pursuing it how can you align your corporate payables to most benefit from the approach, because there is typically something for everyone in terms of the gains afforded by it.


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Topics: Virtual Payments, integrated payables

Using Accounts Payable Software To Kill Checks

Posted by Chris Cosgrove

Jul 10, 2017 2:47:45 PM

Accounts Payable Software is going to reduce the number of checks cut


This should really come as no surprise

...but times are changingPart of that change is going to come by means of how we pay for things and no areas are getting transformed as rapidly as personal payments.  Certainly things like Bitcoin, Apple Pay, and the numerous other payment platforms that have sprung to life like Paypal and various others all spell the end or at least the major curtailing of traditional payment methods like checks.  The question that we want to broach today is what does that portend for B2B payments?

We think that the days of checks in the commercial space are also numbered, albeit it will take much longer for that revolution to set than it will in the personal space.  The primary reason for that is that innovation occurs at a much slower rate in the business space than in the personal space due to barriers in adoption, technology, and conformity unfortunately.  Whereas individuals are always looking to make their time more efficient and easy, the uncomfortable truth is that too many businesses can’t be bothered with improving secondary, back office functions that don’t result in some type of strategic or monetary value add.  Additionally, unless there is some major incentive to change, most companies are content to just carry on with the status quo.

It seems that this is a notion that should be challenged for a couple reasons.


 For starters, if your business exists in a high growth industry or is tech centered, then you may already be primed to push the boundaries by having a culture that propels you forward.  Conversely, if you’re in a legacy business that is stable there may be less pressure to do things to the standards of burgeoning companies and as such you can get caught in a rut of complacency.  Ironically, in businesses that are more antiquated and slow growth, you can stand to increase margins by becoming operationally efficient, so really whether it’s a need to scale and push the boundaries or a need to streamline, the benefits and byproducts of automation are the same.  Now with that said, this piece is purposed to center on the payments and in particular using epayments to kill checks.  

This can be facilitated with our without accounts payable software.  Numerous electronic payment providers have systems that you can utilize to automate the payment functions.  There are numerous electronic means to invoke payment whether Wire, ACH, or even virtual payments are invoked.  From our perspective, the latter offers the best alternative to checks because of the reasons we outline over here.  However, any of these means offer advantages to the costs and burden of traditional check printing.  Alternatively, you could participate in various EDI or e-invoicing networks if you are fairly sophisticated, but know that there can be numerous adoption challenges and significant time and capital outlay to get these systems operational.  For this reason, and until there is some kind of a forced government mandate, we believe that these methodologies will always the trail the aforesaid options.

However, our mission is to help businesses come out from under the burden of paper and paper based document processing.  


As such, check payments are on the chopping block and we want to create awareness about the benefits to automating through accounts payable software.  One of the key elements to our vision for streamlined accounts payable invoice processing is to connect the automation and workflow technology to payment invocation and execution.  That is a major advantage to having both your front end invoice processing automated through accounts payable software that is integrated to your actual payment execution.  You can certainly manage this through multiple systems, but from our perspective, if you can tie these two together you can kill multiple birds with one stone so to speak.  

The other key advantages that ratchet up to kill checks as an option in the B2B space are the enhance security, timeliness of payment controls, and complete visibility to the invoice approval, processing, and payment components of the transactions.  Any way you slice it Accounts Payable software offers tremendous value, but we think beyond the operational elements you can literally monetize to make money for your business and to make a substantial difference in how work gets done making it a no-brainer at least for most businesses to evaluate.


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

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Topics: accounts payable software, Virtual Payments, Electronic Payments

Accounts Payable Software for the new school!

Posted by Chris Cosgrove

Jan 31, 2017 12:39:00 PM

Accounts Payable Software Old School vs New School

Kickin' It Old School

In today’s post, we want to challenge some old school thinking around Accounts Payable software.  One of the prevalent thoughts that has held sway over the entire AP automation industry is really a focus on core invoice processing.  By this I mean that the focus for Accounts Payable software has typically been oriented around streamlining process and expediting process cycles and data accuracy.  While we certainly won’t contend that these are out of fashion, we want to elevate the nature of the conversation to the many potentialities that a cutting edge AP automation approach will deliver.  It’s not that the former thinking is bad at all… in fact, it’s a great start, but just as many things evolve over time, it’s time consider some implications that today’s technology can bring to bear in your business.

Bringin' It New School

Let’s take a quick look beyond the normative elements (things like capture, workflow, document imaging, etc.) of sound Accounts Payable software (at least in terms of invoice automation):


Dynamic visibility - This is a big deal and unfortunately not all businesses grasp what’s at stake with respect to this point which is why we want to bring it into the light here.  Certainly, the ability to be able to call up an invoice from a search perspective has myriad advantages over antiquated paper storage and retrieval methods.  This is not rocket science either.  Simply ask any member of an Accounts Payable department what life is like when the auditors come calling and they’ll probably offer to buy you a bottle of suds and tell you their woes.  The fact is no one likes to be someone’s lackey or Smee, and without fail many AP staff are subject to this type of existence when the retrieval process for invoices is onerous.  Enter solid Accounts Payable software and this issue disappears like the morning dew.  However, having access to data in real time, not just archival, affords the opportunity for data driven business outcomes.  As an example, surfacing invoices with eligible discounts as part of your daily processing queue, will empower an AP organization to function more strategically, execute payment, and pocket the savings generated through an early payment discount.  Absent dynamic visibility AP staff are less empowered to impact their business in as positive a way.


Payment execution - Certainly front end invoice processing is the ideal in terms of AP automation.  Who can argue with divesting themselves of copious and error prone data entry in favor of accurate data throughput without the need for keystrokes?  While that is a great start, and one that only about 40% of the corporate landscape has undertaken we might add albeit surprisingly, to get to the next level savvy finance leaders are integrating optimized payment execution into their AP automation approach.  Instead of integrating multiple modules of disparate technology providers, a one-stop shop approach is becoming increasingly utilized.  As an example state of the art Accounts Payable software can seamlessly handle both the front end invoice processing and the execution of payment across a variety of payment types to include ePayments like ACH, virtual card, wire and traditional payment types like check.  This becomes a boon to the processing flow and the invoice cycle time part of the narrative, but the real kicker is found through monetizing the payment stream via the aforesaid ePayment method that is virtual card processing.  By this means, corporations can tap their AP spend in a new found, sustainable, and low resource requirement way that becomes a spigot of profitability in what is usually a cost generating quagmire, and while this may be news to you, it’s certainly something executives who are trying to steward the bottom line are sure to be happy about.

Mobile empowerment - In keeping with the idea of getting the most productivity out of your workforce, modern renditions on Accounts Payable software have the invaluable integration of mobile technology.  This is also an imperative not only from a search and retrieval standpoint, but also from a workflow escalation and payment execution capacity.  Lost time translates to lost opportunity and if inefficient processing impedes your ability to capture payment discounts or causes you to bear late fees, then something must be done.  To our thinking, one of those somethings is to harness mobility instead of shifting blame to someone being out of the office as the reason something didn’t get processed.  Combined with intelligent workflows and delegation, astute AP leaders can mimic internal business rules driving opportunities for positive business outcomes forward at record pace.

We hope you found this insightful and welcome you to continue learning and growing as we tackle all manner of things Accounts Payable process related!  If you enjoyed this, give us a like and a share!

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Topics: Accounts Payable Process, accounts payable software, Virtual Payments, epayments

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