We have come to an advanced leg in our AP automation journey. The European Union has drafted legislation to encourage its member countries to implement electronic payments between the public sector and its suppliers by November of this year. The resulting economic savings are reported to reach up to 2.3 billion euros.
And while the United States has yet to draft similar legislation, its businesses are focused on making accounts payable more automated. Adopting smarter systems that drive greater efficiencies, deeper analytics and reporting, executive support, and the elimination of tactical tasks are essential goals of this transformation.
So how does your business get ahead in this constantly evolving world of payment automation while maintaining strong relationships with suppliers and vendors? Here’s how partnering with a third party to manage payment optimization can help your team address each of these four key goals.
Adopting smarter systems that drive greater efficiencies
Curious about what it takes to get your suppliers accepting electronic payments? A managed services provider like EML helps you analyze your spend file so your back office isn’t burdened with cleaning and organizing massive amounts of data. A large part of this process involves finding accurate contact information for each of your suppliers and appending missing, incomplete or incorrect data. We pay equal attention to your entire supplier file, instead of focusing only on those top-paid suppliers, and return cleaner, updated vendor information to you when our research is done.
We identify an optimal electronic payment mix for your unique set of suppliers, with an emphasis on virtual cards, to help you save time and generate revenue. We focus on portal payments, call-in payments and secure, electronic lockbox services to get your suppliers to successfully receive virtual card payments and thus maximize your revenue earning potential. Going beyond virtual cards, EML also helps with ACH enrollment and other payment methods to optimize your payments as much as possible.
Deeper analytics and reporting
In the last decade, data analytics has become a top priority for CFOs. Over 90% of CFOs say they need to do more with financial and operations data at hand to help management make critical decisions. It comes as no surprise then that AP teams are leveraging data as a strategic asset from front to back office, and that these same teams are devoting time to organizing and distributing data across the enterprise.
One of the benefits of partnering with a third party provider is the insight you gain into your payments. Here at EML, we provide our partners with access to their very own AP Hub – a robust reporting platform with detailed information about suppliers enrolled in your program, month on month and year on year spend, weekly payment file averages by payment type, complete payment history, and additional trend analysis tools. EML’s AP Hub is a single source of truth giving you complete transparency into your payments and the ability to perform ad-hoc analysis to reach better decisions faster.
It’s time we address the proverbial elephant in the room and set out to solve the issue of getting executive buy-in for payment automation. Accounts Payable isn’t always the first place senior management looks to free up working capital, especially when they know your team is already strapped getting payments out the door on time while performing month- and year-end closing. So, who do you turn to when you need help?
Any experienced payments provider should be able to help you put together a business case for adopting electronic payments. The business case should include the impact the project will have on the organization, goals and objectives and a detailed cost-benefit analysis. The good news is that most payment optimization programs are free and require no additional software or hardware. In fact, we have found that many electronic payment programs generate enough revenue to support other more strategic initiatives – a win-win for AP departments.
Elimination of tactical tasks
Writing checks is a costly and time-consuming proposition. In a recent survey conducted by the Association for Financial Professionals, 82% of organizations said their primary driver for converting to electronic payments was to reduce costs.
When you work with a third party payments provider, tremendous efforts are made to transition as many of your payments possible to electronic methods. This task alone eliminates a large portion of time spent signing, stuffing and mailing paper checks. In addition to optimizing your payment mix, a third party provider like EML, also takes on the responsibility of notifying all of your suppliers about any changes to their payment type and handling any incoming supplier inquiries.
Remember, accounts payable automation is a marathon, not a sprint. Investing resources into a managed service for your payments helps drive organizational efficiencies, provides deeper insights, promotes executive buy-in and eliminates tactical tasks so that your team can become a strategic powerhouse across the enterprise.
If you’re ready to learn more about how EML can transform your AP department from a profit center to a revenue center, reach out to us! We’d love to begin a new partnership with you.