Accounts Payables’ Integrated Payoff

Technology and automation have made inroads into several areas of everyday life — witness the rise of digital assistants and autonomous vehicles. However, in the business realm, some everyday functions remain untouched by tech that can save money and, especially, time.

Many accounts payable (AP) departments are still burdened with manual, paper-based payment processes, or have implemented payment automation solutions only to find that the benefits weren’t as significant as they’d hoped. Thus, accounts payable management is all too often more art than science.

Enter integrated payables — which, done well, offer one way to mitigate the struggles of unnecessary costs, inefficiencies and fraud risks in business payments. In the rush to offer technology as an aid to capturing revenue in the form of discounts and rebates for paying promptly or early, any number of vendors offer “integrated” solutions to banks — which, in turn, work with corporate clients to manage treasury operations.

It’s important to understand that the concept of “integrated payables” is widely misunderstood, with FinTech providers and banks delivering an array of solutions that supposedly fit the definition, but, in some cases, only incorporate just a single payment type.

True integrated payables, however, incorporate all payment types — including virtual card, ACH, check and wire — into a single, streamlined payment process. That’s where the true value of integrated payables comes into play, enabling organizations to have a single, easy-to-manage stream for all the different payment types they handle.

In an interview with Karen Webster of PYMNTS, Jessica Moran, general manager of Paymode-X Business Solutions at Bottomline Technologies, said that such a holistic approach to AP payments is ideal.

“Businesses need a single approach to streamlining payments across systems and payment types,” she said.

In a piecemeal approach, technical implementation, vendor onboarding and payment processes can become fragmented, with one approach for card, another for ACH and another for checks. Not only does this prevent the efficiency gains that many AP departments set out to gain from payment automation, but it leads to inconsistent payment security practices and poor visibility to cash.

Moran added that “it is too complicated for companies to manage different payment solutions and processes inside their organizations. They don’t have time for it, and it’s simply not necessary.”

Solving Friction Points

Finding a solution with these attributes is key to payment automation success for businesses. Solutions should tie in seamlessly with a business’ accounting system, and facilitate a single process for all payment types, said Moran.

The most basic building block of AP management can be a point of friction, she noted. Invoices (which, again, can come across via PDFs, paper or faxes) must be captured and managed, and they must fit within the corporate workflow so payment executives can take advantage of the aforementioned rebate or discount opportunities.

Yet, general inertia may be the most significant hurdle in getting an integrated payables solution in place, Moran added.

“The biggest challenge in getting them to change is to recognize the value of having all this in one place,” across several payment options, and corporates “don’t want programs that are going to take months to get up to speed,” she said. “They want easy connectivity, and they want easy updates. They want one supplier onboarding model” to ease the vagaries of satisfying a wide range of desired payment options.

A more efficient AP approach demands a holistic technology platform, such as Bottomline’s Paymode-X, said Moran. As she pointed out, Paymode-X offers clients a network of hundreds of thousands of corporate customers who have already stated their preferred payment methods — and Bottomline, acting as intermediary, can smooth the onboarding process.

Generally speaking, she noted, businesses should look to take advantage of solutions that enable them to improve control over payment timing, and monetize the greatest portion of their AP spend (which depends on maximizing supplier adoption of virtual card and premium ACH payment methods).

Disparate approaches to virtual card and ACH payments typically require AP departments to go through multiple, disconnected supplier onboarding campaigns. By leveraging a solution provider that couples a large, established network with a unified approach to supplier enrollment across virtual card and ACH payments, businesses can maximize electronic payment acceptance and rebate opportunities.

In an age where, according to Strategic Treasurer, 65 percent of organizations have been victimized by check fraud, security is top of mind. FinTech providers can manage the gathering, authentication and storage of vendor bank account details, and employ multi-factor authentication.

“This is a very exciting time in B2B payments,” said Moran. “There’s been a lot of evolution and innovation happening in the industry, and businesses are better-positioned than ever to take advantage of technology that can help them transform AP processes.”