B2B Payments

The Last Mile of the Procure to Pay Process

While payment automation appears to be everywhere, a surprising number of businesses are still using paper checks for invoice payments. PYMNTS recently spoke with Karla Friede, founder and CEO of Nvoicepay, a provider of ePayment solutions, who shared her thoughts on the benefits that companies can gain by streamlining their procure to pay processes end-to-end.


You recently announced a partnership with Corcentric, which is a provider of cloud-based financial process automation. What is that partnership going to enable Corcentric’s customers to do that they couldn’t do before?

KF: Nvoicepay will enable Corcentric customers to pay invoices electronically. Corcentric’s solution currently automates the invoice capture that comes into accounts payable as well as enabling workflow that’s fully automated; now, by making payment electronically, their customers will be able to automate the last mile of that process.



Could you elaborate on the specific payable complexities that the partnership is going to solve?

KF: Corcentric, like Nvoicepay, is cloud based. They’ve been out there for a while; they have very efficient, very simple solutions for automating invoice capture and invoice processing that allows customers visibility to invoices that they didn’t have before. Using Nvoicepay’s cloud-based payment solution, they will now be able to automate the payment piece, as I mentioned.

Previously, customers were taking that information that is now electronic, putting it back in their accounting systems, and paying those invoices most likely by writing paper checks. Now, instead of taking the electronic information, sticking it into the accounting system, and printing and making the check run, those customers will be able to select the invoice for payment and press “pay.”

What that does for the customers is drive down their costs associated with paper-based check processing. And that means the direct costs, the paper costs, the people time…but it also means taking out some of the error rates and giving greater visibility to those payments.

We take down 75 percent of the customer’s costs associated with writing paper checks. We then add back a rebate: as part of our product, customers can pay their suppliers by ACH, an integrated single-use card, or by printed check. And it’s up to the supplier to decide. But when those suppliers accept card payments, we deliver back a rebate to that customer. So now the customer has driven down cost by 75 percent, and they also get a rebate.

Think about the economics this way: For $100 million in payables volume, by moving to electronic payment, they get back in cost savings and rebates $225,000 a year. The savings are substantial.



Based on your experience, how are companies currently tackling gaps in the procure to pay process? And what do you think they should be doing differently?

KF: Today, when customers think about procure to pay – because procurement has been out there a while and the solutions are well understood and well known – they tend to think about automating the front end.

When you think about paper, and you’re looking at your paper processes, the most visible sign of those is usually the invoice, because it’s the one coming in the mail, getting walked around the building, getting approved, matching up to P.O. documents and getting entered into the accounting system. So most customers, when they think about starting automation, they start at that front end. And payment automation and payment solutions like Nvoicepay – solutions that make it simple to make your payments electronically – are relatively new in the B2B space.

So what we see is that people who understand about payments and the opportunity in payments – in other words, those economics I talked about: $100 million in payables, getting back $225,000 a year – they understand, “Wow, it only takes 8 hours of my time to implement, and I don’t have to do anything else,” which makes payments a great place to start with your automation. Because by starting with payments, you can use that rebate to fund the automation on the front end of the process.

What I see in the marketplace is that customers that really understand the end-to-end flow realize that payments are a great place to start because it’s a quick win: “I can install it; I can get it going with very little effort from my staff. I can show a really visible change in our process; I can drive back a significant impact to the bottom line; and then I can use those funds to automate the front end.”

It’s counter to conventional wisdom, which is to start on the front end. But starting on the back end drives a lot of immediate, bottom-line results that can be used to fund the whole thing end-to-end.



Beyond what you mentioned about the rebate on payables, can you put a number on the overall savings that an organization can realize by streamlining and automating the entire procure to pay process?

KF: I don’t have a number for the front end that’s by invoice or by number of folks, and that’s because there are a lot of variables involved. It depends on size of company, number of invoices, number of heads, etc. So I don’t have an economic number for the end-to-end flow.

But I can tell you that it drives down costs significantly, that it reduces errors. And I think 80 percent of the time in any AP flow is spent chasing down errors – whether it’s an invoice error or just a miscommunication with a supplier. There aren’t good numbers in the industry today, but I believe that’s where a bunch of time is spent.

Automating end-to-end drives down costs, reduces errors, and increases efficiency. You can take your staff and free them up to perform higher value added tasks. It increases visibility and control over that invoice process in that cash flow. Now you can do a better job of getting those discounts on those invoices, but also managing your cash flow. Lastly, it improves on-time payment. So that end-to-end flow has pretty dramatic benefits in touching multiple points in the process.



What’s next for Nvoicepay?

KF: We are really excited about what we’re doing at Nvoicepay. When we look at what’s happening in the market, it’s exciting for Nvoicepay to be the leader of the next generation of accounts payable solutions. What we’re doing, really – when you stand back and think about it – is we’re moving accounts payable into the 21st century, and we’re adding back a quantum leap in efficiency.

When we think about where we’re going and what we’re doing, we’re going to find ways to bring that to more customers. We will find ways to partner and make it very simple for customers to get started, and we will deliver more ways and more innovation on the way customers pay. And we do that so that we can drive back and create that return for the customer, and transform what used to be a headache and archaic process into streamlined, efficient process that really does create significant and immediate impact for our customers.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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