More AP departments and finance executives are recognizing the importance of AP automation due to fraud reductions, significant efficiencies in processing, reduction in errors, real-time reporting, control, and visibility of every payment, and easy reconciliation.
The AP partnership should be a 100% transparent colloboration between two organizations where open communications and customer support are expected.
In fact, a new study from pymnts.com indicated that more and more firms are looking to automate their AP within the next 12 months.
AP departments are typically a cost center where manual processing is laborious on almost every level.
The average?Accounts Payable?department:
- Makes 19 copies of each document
- Spends $20 in labor to file each document
- Loses one out of every 20 documents
- Spends $120 in labor searching for each misfiled document
- Spends 25 hours recreating each host document
Not only that, some estimate that the cost of processing a single check is as much as $10.89 which includes the paper stock, time and effort to print, sign, stuff, and send to every supplier.
These are just a few reasons why companies are looking to automate their AP. So how do you choose the right partner?
Some tips in finding the right partner:
First off, Fintech's are better than any bank because the Fintech has a laser focus on payments and customer support while banks offer many other services and have limited staff and knowledge.
You will not need to change banks with a Fintech supplier.
Here are a few items to consider when interviewing AP suppliers:
- Trust and Transparency: Is the FinTech a card issuer and processor? Card issuers and processors must follow the same strict regulatory and compliance guidelines as banks, so you can trust that your funds and credit card information is safe and secure.
- Integration: You should not have to change your ERP or any accounting software as some will integrate directly with your current platform. There are direct integrations with platforms such as Concur and NetSuite where payments can initiate with just a few calls.
- Vendor Analysis: How many of your vendors will accept virtual card payments? A vendor analysis will identify vendors that already accept card payments, as well as the ones that can be converted from check and ACH to virtual card. The best Fintech's already have partnerships with your best suppliers that maximizes efficiencies and new monthly revenue.
- Vendor Enrollment and Enablement: Do you have the resources and time to contact every vendor and ask if they will accept payments on cards and the day-to-day vendor management? You need to select a FinTech that will do the heavy lifting and manage the enrollment and enablement of your vendors. Questions to ask the Fintech: What percentage of vendors do you convert? What is their vendor management program? Ask for customer references and get “real” results.
- New Net Income: Are you currently being paid to pay your vendors? With virtual cards, for every dollar spent, you can earn a cash rebate. The more virtual card transactions, the more you earn back, providing your company with a new revenue stream. Fintech's will enroll more suppliers than your bank which is why you can use both your bank and a Fintech.
- Ongoing Support: Will you receive reactive or proactive support? In your review process, a critical element is customer service and support. Every FinTech offers support, but is it reactive when there are issues to be resolved or is it proactive to avoid issues in the first place? Speak with reference customers to better understand the level of service and support they receive.
- Data Analytics: Do you know how your vendors are performing? For continuous improvement, you should receive easy-to-use dashboards on spend, rebates, competitive information and similar vendors that accept cards, to supplement your business growth.
Finally, look for a FinTech partner that works with large brands in multiple industries.
A great partner will take on the heavy lifting, from streamlining implementations to vendor enrollment and enablement. Their goals should align with yours:
- Covert payments by check and ACH to virtual card
- Handle all payments on one platform, in one place
- Gain analytical insight to support overall company growth
- Optimize payment mix in favor of more efficient and lower-cost payment methods
- Transform accounts payable from a cost center to a profit center
- Handle customer calls for payments made by the supplier
While more and more companies are finally realizing the major benefits of AP automation, far too many are in the mode of status queue. They feel they have more control with their current processes without even looking at how they can transform their AP team from a cost center to a profit center. These are the same people who work with square wheels and think everything is fine.
Ernst Consulting Group is designed to educate and consult B2B companies on new and innovative Fintech initiatives. We provide Best-in Class customer experiences and partnerships allowing companies to minimize effort and maximize revenue and efficiencies.
Jeffrey A Ernst - 815.354.6105 / [email protected] / www.ernstcg.com
