B2B Payments

Sniffing Out The Savings Opportunities In AP

Are paper checks here to stay in the AP department, or aren’t they? As the debate continues, the fact remains: Paper checks are still prolific in B2B payments and, with that in mind, OneSource is taking action to help paper check users remain efficient.

The Business Process-as-a-Service company has unleashed a new Finance and Accounting Outsource (FAO) solution that integrates into financial management platform Workday to automate multiple aspects of the accounts payable process, including the creation of paper checks.

PYMNTS spoke with OneSource Senior Vice President of FAO Michael Roseman to discuss the tool that streamlines corporate finances on a single platform, and allows businesses to free up working capital for more strategic parts of the enterprise.

 

PYMNTS: First off, can you explain what the FAO service is?

MR: FAO is our newest offering as part of our Business Process-as-a-Service suite. It rounds out the services that we provide – we’re addressing the needs of those customers that want to move from transactional activities towards more strategic activities on the finance side. Our initial service offering is around accounts payable, helping customers with data entry and payment processing. We’ll move into other areas of finance as we mature, based on Workday’s developments as well as customer demand. These areas include accounts payable, accounts receivable, fixed asset accounting, general ledger accounting, analytics, procurement support.


The integration of FAO into Workday provides automated data entry for AP professionals. What can companies expect from the switch from manual data entry to automated? 

MR: We have several different service offering levels. At the fullest, we handle the entire intake of the invoice, whether it’s electronic or paper. We scan and extract the information to put into Workday, we assist in the coding of it to ensure it has the right call center coding and spend categories.

The approval process still rests with our customers – they need to make sure that it’s the right payment, that they’re paying the right amount, and that they have the terms they need to settle a payment. But they say, ‘We want to pay this supplier this invoice on this date,’ and we’ll pick up that file and do the fulfillment, which is printing the check and sending it to process.


Are your business customers mostly paying with checks?

MR: Workday supports ACH, electronic fund transfer, credit card payments, paper checks – all payment types. We remove the labor from the process for customers. We take the paper check printing process and provide a fulfillment opportunity for them. We can take the printer offline, so companies don’t have to worry about the time it takes to print the checks in a mailroom in or out function. The labor involved in the paper check process is what we’re starting with for our customers.


The discussion in AP today is whether or not the check will survive, or, on the other hand, whether it will ever go away in B2B payments. What are OneSource’s thoughts on the debate?

MR: We’re obviously betting on the fact that paper checks are here. From a cash management perspective, companies like paper checks. We think about the fact that the world is moving to a paperless economy, absolutely, in some areas. But there are still a lot of checks that are written, and as long as those checks are written we’ll be able to provide support for our customers.

[bctt tweet=””We’re obviously betting on the fact that paper checks are here” – OneSource”]

 


What’s the plan if the paper check ever does disappear?

MR: Our paper check services are just part of the FAO offering. Invoices are also key, and taking a paper or digital invoice and entering it into a system will remain a process until everyone is on the electronic invoice. Because there is no governing standard for all companies to issue electronic invoices. That pain of ingestion, or intake, will remain, and there will be a role for us within each of these organizations.


Another hot topic in AP today is automation. What are some of the benefits of automation, and what might be some of the challenges? For example, some AP officials have voiced concerns that automation will take up jobs.

MR: I’m not a doomsday person that says automation will remove the role of the worker in this area. There are very few companies who go to market and claim their competitor advantage is their world-class AP processing. If you name a company and look at their financial statements, marketing, value propositions and advertising, they probably don’t focus on their transactions – but they spend money on transactions. We help them transition some of that spend to more strategic activities, so it will be better from an organization perspective. It’s a strategic vision. They’ll realize cost savings because they become more efficient at processing their transactions. How they spend that money is their decision.


The types of benefits you just mentioned – becoming more efficient and realizing cost savings – can be valued by companies of all types and sizes. Has OneSource seen a pattern in the types of businesses using your AP solution?

MR: I haven’t seen a pattern. The companies we work with are companies that recognize the value of our Business Process-as-a-Service offerings, allowing them to move out of the tactical and into the strategic. It would be great if I could tell you that it’s all in health care or all in FinServ. But for us, the only qualification is that a company is on Workday.


So you’re seeing adoption across the board?

MR: Absolutely. We’re seeing small companies with 250 employees up to 43,000 employees – global, multinational organizations.


It’s a unique offering to be able to serve all different corporate demographics.

MR: We really thought about our market position. For the largest organizations, they’ve realized that being too much into the transaction is not strategically attractive to them. They’re looking at cost savings and market pressure, or board pressure, to do things differently and find savings where they can. So there’s an opportunity to adopt our services.

For small businesses who are scaling and rapidly growing, it’s hard to scale in the transactional business, because you scale by adding people. Here’s a great example – the other day I was talking to a company, and it turns out we are six-times more efficient at payroll processing than they are internally. Will they see a six-times decrease in their costs? Not necessarily. But they can be able to spend those dollars in a different way.

We can do similar things on the AP side for them. I don’t want to prescribe how those cost savings are used for each company, but if we think about a rapidly growing company, are they going to want to keep adding people into AP or payroll? Probably not. With our technology we let them use their dollars to support their main objective, be it customer acquisition, retention, revenue, etc.


OneSource seems to be working toward helping businesses bring all of their AP processes onto a single platform. Why is that important to achieve?

MR: Absolutely – isn’t it fantastic to be able to look at your entire business out of one system rather than having to build connections between systems and aggregate data? It saves time, and your infrastructure costs are lower. If you’re managing one application versus multiple applications, the complexity of your organization is reduced. It simplifies your world.

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