A Better Payments Readiness Model for the New World

A Better Payments Readiness Model for the New World

Difficult economic times are ahead. We don't know how difficult they’ll be, or how long they’ll last, but finance teams around the globe are bracing for them. Cash management and cost-cutting will be essential. Fraud protection—which is always a concern—will be even more important as criminals seek to capitalize on fear and confusion. If that wasn’t enough, companies have to support remote AP teams simultaneously.

By late March, a significant portion of AP staff had already begun working from home. This posed some challenges. There’s a long-held belief that anything related to the handling of company funds needs to happen inside the building. This widely accepted rule is supported by physical reality since many companies aren’t automated enough to support alternatives.

So paper invoices and expensive checks continue to send through the mail, and reference documents fill the cabinets. Even companies with cloud-based ERP systems may find them cumbersome to use when attempting to VPN in from home. AP still fields many supplier calls about payment errors or missing funds. For that, they rely on enterprise telephony systems, which are difficult to replicate in their own homes. Finally, there’s a lot of collaboration and teamwork that happens with accounts receivable, finance, and other functions, and a lot of that centers around moving paper.

Unsurprisingly, in a poll of 131 accounts payable professionals Nvoicepay conducted during a recent webcast on business continuity, 39 percent said the pandemic significantly impacted their operations. Nine percent said there was no impact because they still had to go into the office.

A second poll also found four key challenges accounts payable teams are working through as they implement remote payment operations:

The challenge is overwhelming. Based on our experience in the market, our product team has developed a four-part hierarchy called the “Supplier Payments Readiness Model” to help customers think through all the dimensions of their remote payment organization efforts.

1. Obtaining essential tools

In our poll, 26 percent of respondents reported that equipping their teams to work from home is a top focus, indicating teams are still struggling with this. People will need computers. There’s a spike in demand right now, so ideally, you have some already in your inventory. If not, work on building that stock for future preparedness.

Your team will need internet access and a home office setup, preferably a secure one. They're going to need telephones and phone routing because those trying to contact your AP team will likely call your central office phone number.

They also need collaboration tools. With employees working remotely, you may run into productivity issues if you try to have everyone work via email.

Don’t forget to address inevitable morale issues proactively. Working remotely can be lonely and stressful if you’re used to be in the office with your colleagues all the time. And, with kids schooling from home, parents are being asked to play the role of educator along with their professional role. It’s a very challenging time. Think about establishing a regular team call, as well as frequent individual check-ins.

2. Establishing remote workforce

Once you have remote capabilities set up, you’ll need to figure out your new workflow. The typical AP process has a lot of moving parts, some automated and some manual. Sketch out your whole process. Identify what you can currently do remotely, what can quickly become remote, and when you need people to come into the office. Designate those assignments, so you don’t have too many people showing up at once.

Start to look for technologies that can fill the gaps between manual processes, such as AP workflow systems, invoice ingestion systems, and payments automation. You may also want to make a case for a cloud-based ERP if your organization doesn’t have it, as well as e-invoicing to eliminate paper invoices. You want your team focused on cash management, not paper driving.

3. Providing visibility and control

As you redesign your workflows, re-evaluate your internal controls. Most established under the notion that people would be in the office, with locked filing cabinets and limited access to certain information. In a remote environment, you will probably need to put new controls in place.

Companies tend to hire more people in accounts receivable during a downturn, so there may be an uptick in inbound calls from suppliers trying to accelerate payment at the same time you’re attempting to conserve cash. Conversations between you and your suppliers need to happen so you can renegotiate terms and set them up for electronic payments. It’s best if you also work with internal business partners—such as treasury and procurement—to make sure that only prioritized payments are going out.

Maintaining internal controls will be very challenging unless you move to cloud-based technologies that give your team remote, role-based controls, visibility, and approval capabilities.

4. Mitigate payment fraud and risk

The convergence of three very challenging situations—generalized fear and chaos; hastily assembled remote work processes, and a tough economic environment—is creating a perfect storm for fraudsters to exploit. According to the 2019 AFP Payments Fraud and Control Survey Report, 80 percent of organizations surveyed said they experienced actual or attempted payment fraud in 2018. Eight percent of the respondents from that same survey said they had payment fraud losses of 0.5 to 1.5 percent of annual revenues.

This is already concerning since sophisticated cyberattacks on ACH and wire payments have been on the uptick. You want to shift vendors to electronic payments, but you also have to put new controls in place. Banks don’t provide the same positive pay or positive payee services on ACH and wire payments, and they don’t assume liability for fraud. The inability to recover those payments increases your risk. Paying your suppliers by virtual card will help you offset costs with rebates, and provide you with a more secure way to pay.

It’s anyone’s guess how long we are going to be in lockdown mode. With money tight, it’s tempting to look at these as stopgap business continuity measures that you don’t want to overinvest in. I would argue that investing in AP automation is long overdue. Even if everyone goes back to the office in a few months, do you want your employees to return to printing checks and shuffling paper? And what about the next crisis?

Forward-thinking companies have been adopting payment automation technologies precisely because they provide AP with cost savings, superior visibility and control, and fraud protection—everything that’s called for at this moment in time. They also allow you to maintain your operational workflow—even in a remote environment—without skipping a beat. It’s not just the right thing to do right now. It’s the right thing to do, period.

  • Previous Article
    How to Support AR with Electronic Payments
    How to Support AR with Electronic Payments
  • Next Article
    This is How Rooted Checks are in Our History
    This is How Rooted Checks are in Our History

Most Recent Articles

A Better Payments Readiness Model for the New World

Though many of us expect to return to the office soon, we still face a challenging economic downturn ahead. The status quo is still shifting, and in need of a new business model. Nvoicepay's VP of Product and Strategy, Josh Cyphers, lists the constructive changes you can make to meet your business' needs.

Featured Fintech Resources

How Fintechs are Redefining International Supplier Payments

There’s much more to international wire transfers than just the transfer itself. There's a labor-intensive process looming for both parties in the background.

It's Time to Put Your Payments on the Fintech Bullet Train

Managing different payment processes can be cumbersome, which is partly why businesses favor checks. See how fintechs use automation to streamline all payments.

Get to Know a Fintech Expert -- PCI and SOCs

An interview with Nvoicepay's Compliance Director on the importance of security and compliance standards like PCI and SOC—all through the lens of B2B payments.

Beyond the Rebate: What Fintech Brings to Treasury and Finance

VP of Sales Kristin Cardinali draws upon 15 years of experience to contrast outdated bank procedures with streamlined fintech solutions.

All Blog Posts

Virtually Fraud-Proof: Why Now is the Time to Grow Your Virtual Card Program

As organizations work to improve their defenses against ACH fraud, they should also ramp up their use of virtual cards as much as possible. Supplier objections to fees have always acted as the barrier between the status quo and advanced payment options. The B2B payments landscape is changing, and in light of rising fraud, it may be worth revisiting those conversations with suppliers.

What's an Accounting Tech Stack?

Let us be the first to say: you’re not alone if you’ve never heard of the term "tech stack" before. Some of us have heard the term used for departments like sales and marketing, but never for accounting.  Today we’re going to talk about what an accounting tech stack is.

Safety First: How to Handle Supplier Banking Data

2020 was an eventful year for business payments. We saw expansive leaps in digitization, accompanied by new challenges, including the way they handle contemporary security concerns.

Is Automation Improving the Employee Experience?

Is it possible for automation to go too far—to render employees obsolete?

COVID-19 has Inspired Change in the Automotive Industry

One of the interesting threads of the COVID-19 story is how it pushed businesses to adopt new technology.

Here are the Top ERP Transformations That Support Buyers

B2B companies are currently up to their necks in "digital transformation." Maybe, just maybe, it's time to take a step back and look at things through a different lens.  

What is Happening in the B2B Payment World in 2021?

Clear B2B payment trends have emerged, and are likely to unfold in the next twelve months, according to CEO Josh Cyphers of Nvoicepay, a FLEETCOR company.

How to Identify a New Type of BEC: Vendor Email Compromise

A particular faction of fraudulent activity—‘BEC’, or Business Email Compromise—has gained notoriety over the years and is such a large operation that it’s become more of an umbrella term for various attacks. Among these subsets comes the newer term, ‘VEC’, or Vendor Email Compromise.

Uncover New Opportunities from a Return on Experience

Everyone knows the term "return on investment"—or “ROI." I think we should re-establish a less-recognized concept: return on experience.

What is the New Normal for Businesses and AP?

Post-pandemic businesses have adapted by interfacing with technology to get the same tasks done with less redundancy and bulk. Daily operations have stripped down to bare essentials, some bearing costs to the customer, but many renewed in their devotion to make a more human connection with those they serve.

8 Ways That Fraud Emails Can Compromise Your Back Office

If there’s one thing payment companies of any caliber are familiar with watching out for, it’s Business Email Compromise. Here are some of the most common BEC techniques that fraudsters take advantage of.

Here are the Top Tips for Preventing ACH Credit Fraud

Forced to work from home during COVID-19, accounts payable departments have accelerated plans to move away from paper checks and pay more of their suppliers by ACH. That, in turn, accelerated another trend: fraud.

3 Hidden Costs of International Business Payments

If you have overseas suppliers, you know that making cross-border payments can be expensive. Here are our suggestions for removing hidden costs.

Financial Transformation Breakthrough: Are You Starting Too Big?

Today's CFO is expected to be highly strategic. But does that always have to mean they must undertake Transformation with a capital "T?"

Our Viewpoint: A Powerful Solution for the Construction Industry

COVID-19 has thrown construction industry back offices for a loop. Trying to get employees equipped to work securely from home; figuring out how to make manual processes work when everyone's working outside the office; applying for and administering PPE loans to keep paying salaries for unionized workers—all of these are prominent topics of conversation.

Immediate Benefits of Accounts Payable Automation

When people hear the concept, "Accounts Payable Automation" they take it either one of two ways: they understand its depth and complexity completely, or the phrase vaguely references “that expensive thing the big companies just started doing” or “that option for businesses without a proven accounts payable process already nailed down.”

Mind the Asterisk: What to Look for in a Card Solution

Credit cards are a valuable component of a supplier payment program. Not every supplier will accept card payments, but many do prefer the speed, convenience, and security that comes with it. The company making payments also gets a one or two percent rebate. Except when they don’t.

Is Your Payment Processing Antiquated?

Time to get off the "horse and buggy" that is paper checks!

Just How Easy is the Deployment of Payment Automation?

The history of accounts payable automation is relatively short and painful. The future looks much brighter.

Making Your Case: The Four Es of Payment Automation

Paying suppliers by check is a practice that has endured for much longer than anyone would have imagined. Though COVID-19 appeared to be the tipping point for companies to go electronic, checks still cause massive bottlenecks in AP processes. Here are the Four Es to consider when making a case to automate your payments process.