Accounts Payable

AP Automation Sails Through Onboarding

accounts payable

More companies are focusing now on the onboarding process as a first line of defense against sleeper fraud, by making sure that fewer fake accounts get created to begin with. Onboarding is also a stage where new business relationships can get off on the right (or wrong) foot, based on the amount of friction encountered by onboarding clients, and their feelings about it. Refer back to the first sentence to see why this starts to get painfully complicated, and quickly too.

The March 2020 Next-Gen AP Automation Tracker® done in collaboration with Bottomline Technologies, contains a wealth of information and inspiration for treasury and finance executives faced with issues of reducing fraud and error, cutting costs and increasing payments accuracy across the board. The decision to automate accounts payable (AP) is critical given today’s demanding clients, but it’s also becoming indispensable for forging strong relationships.

Check That Out

Onboarding is generally seen as an irritating but necessary step in opening new accounts, and automated account opening capabilities have been exploited across a number of financial product types. There are also legal matters of compliance, and customer experience is increasingly seen as an important part of the overall offering. But it all hinges on reliable data.

“Fifty-eight percent of business leaders believe enhanced data insights can help their organizations comply with regulations and identify areas of concern,” the report states. “Performing such deep background checks can be challenging for firms with limited resources, though. A grand majority — 96 percent — of U.S. employers report completing at least one type of criminal background check, which can cost $20 to $100 per person. Such checks on companies are much costlier, and these expenses grow as more suppliers are onboarded. Some large firms even report working with more than 100,000 suppliers at a time.”

At a time when layered digital security systems and anti-money laundering (AML)/know your customer (KYC) controls are the new normal, it’s surprising that nearly 50 percent of companies still use manual methods of vetting new clients. That number is a bit misleading though, as manual vetting is more part of a mix among AP departments, 72 percent of which collect digital info on new clients while nearly 68 percent like to look folks in the eye when they negotiate new deals, and still do so manually.

Automation Makes Friends

The “relation” part of “relationship” isn’t easily automated and clearly AP pros have favorite methods that typically include a mélange of tactics to prove new accounts are not being faked — even as these same companies are being welcomed as trusted partners. But the speed and accuracy AP automation can help organizations make friends while making money.

“Timely payments boost firms’ credibility with partners, keep collaborations solid and enable businesses to better negotiate discounts on services or products,” The March 2020 Next-Gen AP Automation Tracker® states. “This in turn allows them to better manage cash flows and could even earn them discounts for early payments.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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