Did you get a chance to attend PayStream INNOVATE’14 in San Antonio this past week?
I had the pleasure of leading a learning session and sitting on the closing panel “What does the perfect Purchase to Pay look like?” This post will cover the highlights of my session “Key Advantages of an Optimized Epayables Platform”. You can find this presentation slides here on SlideShare.
The only surprising thing about this list is that it’s remained fairly unchanged for the last 10 years! Many people use the acronym P2P (purchase to pay) as if automation across the entire purchase-to-payment process exists, providing control and visibility over the entire lifecycle of a transaction — from the point an item is ordered to the point the final invoice is paid. However, what we’ve found is that the level of automation and state of the industry could more accurately be described as “Procure to Payment Ready.” Automation of most so-called P2P processes stop short of completing the payment, meaning that a fully functioning P2P solution just doesn’t exist today. Proof of this can be found in the industry numbers provided by TAPN.
Roughly 67 percent of all corporate payments are still made by check, only 32 percent are made by ACH, and 1 percent by credit card.
The benefits of moving to a 100 percent electronic payment process are compelling, saving $2 to $5 per payment and doubling this savings with the right AP Card product.
Frankly it’s the inability of the banks to deliver the combination of technology and services required to enable customers to truly move to 100 percent electronic payments.
There are five key attributes that all B2B payment solutions should offer:
Together, these attributes deliver dramatic, long lasting benefits to the bottom line:
Interestingly, the five key components of an optimized epayables solution listed above bring us closely in line with PayStream’s Henry Ijams definition of the 'Perfect Payment'. According to PayStream, a Perfect Payment is touchless, enables users to control and adjust payment information before errors occur, is made on time, uses the cheapest payment method possible, receives card-based rebates when possible and achieves the highest possible discount.
Importantly, moving to Perfect Payments is unlike moving to Perfect Purchases — it’s so much easier! It doesn’t require changing processes, aligning people or departments, or changing purchasing behavior. Your time commitment is minimal and the results are immediate.
With all benefits you create in savings and rebates, you’ll have the resources to tackle the rest of your AP automation projects and create the perfect purchase.
Follow the conversation about strategic payments on Twitter at @KarlaFriede.