It's a Wrap! PayStream INNOVATE'14 P2P Conference Reflections

It's a Wrap! PayStream INNOVATE'14 P2P Conference Reflections

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.

According to the 2013 TAPN Benchmark Survey, these are the top concerns of an accounts payable department:

  • Improving processes/reducing errors
  • Automating manual processes
  • Managing time/improving productivity
  • On time payments

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.

Despite the obvious value, what’s holding the industry back from moving?

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.

Five key components of an optimized ePayables solution

There are five key attributes that all B2B payment solutions should offer:

  1. Simplicity – The ability to work across all ERP systems, all banking partners, and offer all payment types in the same workflow — with no major changes in your process. Otherwise it’s just easier to keep writing checks!
  2. Flexibility – Absolute payment visibility and control from payment inception to successful completion.
  3. Supplier Enablement – Not the once-a-year or once-a-quarter variety but ongoing efforts to sign up all suppliers to accept electronic payments, and continuous efforts to ensure supplier information and changes are updated and maintained  in real time.
  4. Payment Optimization – Automatically process payments in the method that delivers the greatest benefit, including lowest transaction cost and highest card rebate at every point in time a payment is made.
  5. Payment Support - This crucial yet often overlooked stage ensures payment questions from you or your suppliers have immediate resolution from a single knowledgeable source.

Advantages of optimizing epayments

Together, these attributes deliver dramatic, long lasting benefits to the bottom line:

  • Cost Reduction. Drive out 75 percent of the costs of your current payment process.
  • Increased Efficiencies. How much time would you save if you didn’t have to maintain your supplier information, answer supplier questions, or track down payment information for reconciliations?
  • Error Reduction. Cut payment errors by 50 percent and prevent them before they happen.
  • Increased Controls and Security. Detailed visibility, control and security. 24/7 at your fingertips.
  • Card-based Rebates. These should double your cost reduction savings without you having to maintain any vendor information!

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.

In short, it’s an easy win

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.

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