The survey asked about tools from financial institutions. The supplier payment pilot that BILL, Visa and Billtrust launched in October covers a specific task. A buyer decides what to pay, and BILL’s agent carries out that instruction on the supplier’s website. The agent’s authority comes from the buyer’s approval for that invoice.
BILL Founder and CEO René Lacerte described the job on the company’s Nov. 5 earnings call. Even after a buyer approves an invoice and schedules the payment, an employee may still have to sign in to the supplier’s portal and enter a card number.
Billtrust uses Visa’s protocol to verify the agent before giving it access. The agent uses tokenized card credentials, and the supplier’s payment acceptance rules still apply. The companies said the pilot was processing card payments at launch with participating BILL buyers and suppliers using Billtrust.
What Happens When a Portal Rejects a Payment
Consider a restaurant paying its food distributor, packaging supplier and equipment service company. An agent could submit all three approved payments if it has access to the suppliers’ systems and each payment meets the applicable rules. If the packaging supplier’s portal rejects the card, the bookkeeper may need to arrange another way to pay. If the equipment company’s portal shows a higher balance than the approved invoice, someone has to check whether the supplier revised the bill or whether the portal includes another charge.
The supplier has its own bookkeeping to do once the money arrives. A distributor that ships to several locations for the same customer needs to know which invoice the payment covers before it can clear the balance. Melio’s network, launched in June, says its agents sign in to suppliers’ billing or receivables systems, identify their preferred payment methods and return details that help match the money to the invoice.
A supplier may also offer a discount in exchange for earlier payment. Tungsten Automation CEO Peter Hantman told PYMNTS that the interval between invoice approval and payment is an opportunity to consider such offers. The supplier has to decide whether getting cash sooner is worth accepting less. The buyer has to decide whether the discount warrants releasing cash ahead of schedule.
Fewer bills are being paid ahead of schedule among the larger businesses tracked by the September PYMNTS Intelligence Working Capital Index. The share of payables paid early fell to 17% from 37% in the previous edition. The latest survey drew responses from 120 CFOs and treasurers at U.S. and Canadian companies with annual revenue of $50 million to $1 billion.
For a buyer paying on the due date, a portal rejection leaves less time to correct the problem. If two of the restaurant’s three payments go through, the bookkeeper needs to know which supplier is still waiting and whether the third payment failed because of the card, the invoice or the portal.
