Across the corporate enterprise, departments are always looking for ways to reduce costs. This is especially true in accounts payable, as reducing costs is among the top priorities of most accounts payable departments. Ardent Partners finds:
One way to achieve this objective is pay suppliers electronically, instead of with a paper check. In fact, some providers of electronic payments solutions eliminate your costs to pay suppliers from Day 1 – regardless of where you stand in the migration from paper checks to electronic payments.
Lower operational costs are the top reason businesses adopt electronic business-to-business payment methods such as virtual cards, the Institute of Finance and Management (IOFM) reports.
Here are 7 ways that electronic payments can save your accounts payable department big money:
A single payment file upload initiates payment to all suppliers; instructions are parsed, and payments are remitted in all payment methods, including paper check, virtual card, or Automated Clearing House (ACH). This eliminates the need to login to multiple banking systems, and the cost of paper, postage, printing, and the mailing of paper checks.
Integrating an electronic payments solution with the general ledger in your ERP platform provides real-time payment reconciliation that eliminates the need for the costly manual keying of data or the decoding of banking messages.
Uploading a single payment file eliminates costly error-prone manual processes. Payment information also can be pushed automatically from your ERP platform. And many electronic payment solutions provide tools for identifying duplicate payments.
Electronic payments can be seamlessly integrated with legacy systems such as an ERP platform (including Sage, Microsoft Dynamics GP, and Abila MIP) without requiring material changes to existing accounts payable workflow processes. Approved transactions are exported downstream, eliminating duplicate entry of invoice information and enabling automatic updates of invoice and payment information to the ERP application.
Lower Cost of Goods:
Electronic payments provide greater control over the timing of payments to suppliers. This opens the door to more early-payment discount opportunities. Eighty-percent of businesses receive invoices that offer early-payment discounts, per IOFM. Businesses that take advantage of just a discount term of 1/10 net 30 earn an annualized 18 percent return – a lot more than they can earn from a typical interest-bearing bank account.
Stronger Supplier Relationships:
With electronic payments, suppliers have 24/7 access to the status of their payments and to payment history. This visibility helps suppliers better manage their cash without the need to call or email buyers. Attracting and retaining the right suppliers helps reduce your cost of goods, while avoiding potential supply chain disruption.
Transforming Accounts Payable into a Profit Center:
Businesses may earn rich rebates on card spend, eliminating the cost of accounts payable and generating revenue for the business.
Does your business want to save money in 2018?
If so, let us show you how electronic payments solutions from ACOM can help. Contact us today!