David Johnson, AP solutions manager, Perceptive Software
In a day and age where the corporate mantra includes: “do more with less,” “work smarter not harder,” or “Kaisen,” we still see many organizations processing accounts payable invoices the old-fashioned way. That is, many organizations still receive a majority of their invoices via paper, route them through the organization through intercompany mail--or just walking them from desk to desk, move invoices from pile to pile (waiting to be matched, matched/waiting to be entered, entered/waiting to be paid, paid/waiting to be filed, filed/hopefully to be found again).
Perhaps it’s time to say, put your money where your mouth is. Better yet, put more money on your bottom line by investing in an enterprise content management system that will make your AP processing significantly more efficient.
The Institute of Financial Operations recently conducted a survey regarding the automation of accounts payable with the results issued at their annual Fusion Conference in Orlando, Florida. According to their study, more than 75% of the respondents indicated that they receive a majority of their invoices via paper. Of those responding, 39% stated that their paper invoice volume exceeded 90% of their total volume.
When looking at the paper invoice volume, 32% indicated that their volume over the past year has not changed. When combining the following categories over the past year: slightly lower, unchanged, and slightly higher, the results showed that over 80% of paper invoice volume has essentially remained static. There appears to be no end in sight of paper invoices for these organizations.
There is a cost associated with the manual payment process too. According to this same study, 41% of respondents indicated their processing cost per invoice was $5.00 or less while 59% reported a per invoice cost in excess of $5.00. These processing costs savings do not include the potential for early payment discounts offered by vendors.
I attended Disney’s Accounts Payable Department presentation at Fusion on their world-class accounts payable processing. They reported a per invoice cost of $1.61 per invoice with the aid of automation. It’s worth noting that Disney processes in excess of 5 million invoices annually. Thus, a mere change in cost per invoice of $0.01 will affect their bottom line by $50,000.
So c’mon, do more with less and work smarter not harder, let automation bring bottom line results to your organization. Your competitors are.
What do you think? Post your comments below.
Showing posts with label AP. Show all posts
Showing posts with label AP. Show all posts
Tuesday, June 14, 2011
Friday, May 13, 2011
Best operations-improving strategies
By Mark Brousseau
During a pre-conference networking lunch at Fusion 2011 at the Gaylord Palms Resort and Convention Center in Florida, attendees were asked to share the best operations-improving strategy that their accounts payable (AP) department has implemented in the past 12 months. Here are the operations strategies that the luncheon attendees said were the most effective during the past year:
... Provided AP processors with two computer monitors, reducing errors and increasing efficiency
... Took the time to better understand AP processes (became "black belts" in evaluating processes) to weed out the processes that don't add value
... Migrated more payments from paper check and wire transfer to automated clearing house (ACH) transactions
... Separated straight-through and exceptions processors
... Deployed a new enterprise resource planning (ERP) solution
... Deployed a purchasing card program
... Became more open-minded to new ideas
... Started reimbursing via a debit card since some people won't take direct deposit and paper checks are too costly and inefficient
... Began measuring and improving input quality, in turn, increasing AP productivity without changing any processes
... Began e-mailing and faxing remittances to save time and postage associated with paper remittances
... Developed a proprietary travel and expense (T&E) reporting system
... Brought AP functions previously done in India back in-house, resulting in savings of $26,000 a month, largely from fewer mistakes
... Implemented an imaging and workflow solution, reducing processing time and enabling all staff to know where an invoice stands in the approval process
... Standardized on one system and one process whenever possible
... Implemented virtual card payments
... Automated accounts receivable (AR) refunds
... Consolidated various overnight shipping and cellular phone accounts into "master" accounts, allowing the company to negotiate discounts of 18 to 50 percent off list prices
... Automated payroll processing with ACH
... Eliminated duplicate vendors, in turn, eliminating many duplicate payments
What is the best operations-improving strategy your AP department has implemented in the past 12 months? Post it below.
During a pre-conference networking lunch at Fusion 2011 at the Gaylord Palms Resort and Convention Center in Florida, attendees were asked to share the best operations-improving strategy that their accounts payable (AP) department has implemented in the past 12 months. Here are the operations strategies that the luncheon attendees said were the most effective during the past year:
... Provided AP processors with two computer monitors, reducing errors and increasing efficiency
... Took the time to better understand AP processes (became "black belts" in evaluating processes) to weed out the processes that don't add value
... Migrated more payments from paper check and wire transfer to automated clearing house (ACH) transactions
... Separated straight-through and exceptions processors
... Deployed a new enterprise resource planning (ERP) solution
... Deployed a purchasing card program
... Became more open-minded to new ideas
... Started reimbursing via a debit card since some people won't take direct deposit and paper checks are too costly and inefficient
... Began measuring and improving input quality, in turn, increasing AP productivity without changing any processes
... Began e-mailing and faxing remittances to save time and postage associated with paper remittances
... Developed a proprietary travel and expense (T&E) reporting system
... Brought AP functions previously done in India back in-house, resulting in savings of $26,000 a month, largely from fewer mistakes
... Implemented an imaging and workflow solution, reducing processing time and enabling all staff to know where an invoice stands in the approval process
... Standardized on one system and one process whenever possible
... Implemented virtual card payments
... Automated accounts receivable (AR) refunds
... Consolidated various overnight shipping and cellular phone accounts into "master" accounts, allowing the company to negotiate discounts of 18 to 50 percent off list prices
... Automated payroll processing with ACH
... Eliminated duplicate vendors, in turn, eliminating many duplicate payments
What is the best operations-improving strategy your AP department has implemented in the past 12 months? Post it below.
Monday, May 2, 2011
AP professionals see benefits to cloud computing
By Mark Brousseau
Accounts payable (AP) professionals see "minimal IT involvement" as the biggest benefit of using Software-as-a-Service (SaaS) or cloud computing for AP processing, according the findings of the 2011 AP Automation Study by International Accounts Payable Professionals. Nineteen percent of survey respondents identified "no capital investment" as the biggest benefit of cloud computing or SaaS, while 17.5 percent cited "lower cost per invoice" and 14.3 percent identified "fast start-up."
Some 12.7 percent of respondents identified "no software or hardware " as the biggest benefit.
Randy Davis, vice president of sales and marketing operations for eGistics isn't surprised that these benefits would rank high in the minds of AP staff. "Cloud offerings have always touted minimal IT involvement, no capital investment, fast deployment, and no on-site software as benefits," he notes.
But Davis believes that the ability of cloud-based document processing solutions to remove paper management from AP processing could deliver even greater benefits to AP professionals. "Today's cloud-based AP solutions significantly improve on key usability factors such as electronic capture, structured indexing, search and retrieval, work allocation, data updates and corrections, and audit and tracking -- things that directly contribute to the smooth operation of an AP department," Davis says.
"eGistics believes that business users will increasingly appreciate and accept the benefits of SaaS and cloud computing for critical tasks such as AP processing and management, and that such benefits will soon be taken for granted. At the end of the day, AP departments are looking for solutions that help them do their jobs faster, more accurately and with better accountability," Davis concludes.
What do you think?
Accounts payable (AP) professionals see "minimal IT involvement" as the biggest benefit of using Software-as-a-Service (SaaS) or cloud computing for AP processing, according the findings of the 2011 AP Automation Study by International Accounts Payable Professionals. Nineteen percent of survey respondents identified "no capital investment" as the biggest benefit of cloud computing or SaaS, while 17.5 percent cited "lower cost per invoice" and 14.3 percent identified "fast start-up."
Some 12.7 percent of respondents identified "no software or hardware " as the biggest benefit.
Randy Davis, vice president of sales and marketing operations for eGistics isn't surprised that these benefits would rank high in the minds of AP staff. "Cloud offerings have always touted minimal IT involvement, no capital investment, fast deployment, and no on-site software as benefits," he notes.
But Davis believes that the ability of cloud-based document processing solutions to remove paper management from AP processing could deliver even greater benefits to AP professionals. "Today's cloud-based AP solutions significantly improve on key usability factors such as electronic capture, structured indexing, search and retrieval, work allocation, data updates and corrections, and audit and tracking -- things that directly contribute to the smooth operation of an AP department," Davis says.
"eGistics believes that business users will increasingly appreciate and accept the benefits of SaaS and cloud computing for critical tasks such as AP processing and management, and that such benefits will soon be taken for granted. At the end of the day, AP departments are looking for solutions that help them do their jobs faster, more accurately and with better accountability," Davis concludes.
What do you think?
Tuesday, April 12, 2011
Interest in p-cards still going strong
By Mark Brousseau
Want more proof of the continued strength of purchasing cards (p-cards) as a key component of accounts payable (AP) programs? Look no further than this week’s NAPCP Commercial Card and Payment Conference at the Paris hotel in Las Vegas.
Some 657 people – representing 265 end-user organizations and 85 provider organizations – are in attendance at this year’s NAPCP event, up from 616 attendees last year (although still down from the 850 people that attended NAPCP’s event in 2008). Overall, 54 percent of the attendees are from end-user organizations and 46 percent of the attendees are from provider organizations, such as banks.
Among the end-users in attendance, 51 percent describe their experience level as “advanced,” while another 39 percent say their experience level is “intermediate.” Only 10 percent of attendees at this year’s NAPCP event say they are “beginning” with p-cards – further proof of the growing maturity of p-cards. In terms of the sectors represented, 61 percent are from corporations, while 23 percent are from government or primary education and 16 percent are from higher education.
By far, the hottest topic among attendees is how to grow their existing p-card programs to further reduce costs, increase productivity, and earn rebates. Many attendees also are looking for ways to better integrate p-cards with their purchase-to-pay (P2P) initiatives (it seems many more P2P professionals are in attendance).
Want more proof of the continued strength of purchasing cards (p-cards) as a key component of accounts payable (AP) programs? Look no further than this week’s NAPCP Commercial Card and Payment Conference at the Paris hotel in Las Vegas.
Some 657 people – representing 265 end-user organizations and 85 provider organizations – are in attendance at this year’s NAPCP event, up from 616 attendees last year (although still down from the 850 people that attended NAPCP’s event in 2008). Overall, 54 percent of the attendees are from end-user organizations and 46 percent of the attendees are from provider organizations, such as banks.
Among the end-users in attendance, 51 percent describe their experience level as “advanced,” while another 39 percent say their experience level is “intermediate.” Only 10 percent of attendees at this year’s NAPCP event say they are “beginning” with p-cards – further proof of the growing maturity of p-cards. In terms of the sectors represented, 61 percent are from corporations, while 23 percent are from government or primary education and 16 percent are from higher education.
By far, the hottest topic among attendees is how to grow their existing p-card programs to further reduce costs, increase productivity, and earn rebates. Many attendees also are looking for ways to better integrate p-cards with their purchase-to-pay (P2P) initiatives (it seems many more P2P professionals are in attendance).
Monday, January 17, 2011
Changing the CFO’s Perception of AP
By R. Edwin Pearce
Historically, if you asked a CFO to tell you the first thing that popped into their mind when you mention accounts payable (AP) processing, they likely would have responded with some variation of “cost center.” The fact is, as a percentage of revenue, the costs associated with AP processing typically represent a small blip on the radar of most companies. But as companies have tightened their spending as a result of the recent economic downturn, that blip is now a significant opportunity.
More than 75 percent of AP departments report into the CFO, according to various studies. With CFOs keenly interested in cost containment and improved cash management, AP leaders would be well served to find ways to deliver strategic benefits to the organization. Notably, 56 percent of CFOs believe AP represents a more strategic opportunity for improvements than it did two years ago.
One reason CFOs are changing their tune on AP is that they are seeking ways to avoid further layoffs, while weathering the recession. To this end, most are tightening controls over employee spending and placing greater emphasis on measuring and monitoring the company’s financial health.
These types of activities are clearly in the AP department’s wheelhouse.
CFOs are looking past the traditional paper-encumbered stereotype of AP and focusing more closely on the tremendous amount of financial data that flows through AP. From this perspective, they see AP as a means to improving working capital management, reducing supply chain risk, and greatly reducing the incidence of fraud. Most importantly, CFOs recognize that AP can help a company improve its cash position by extending days payables outstanding, avoiding late payments, capturing early-pay and volume discounts, and ensuring that payments and orders are compliant with contracts.
At many companies, AP no longer is merely a back-office transaction function where efficiency and low cost of operations are the only requisites for success; AP processes are being more tightly linked with treasury functions to help maximize working capital management. This is part of an overall move to align core processes across business functions to support corporate strategic initiatives.
While this increased corporate standing is good news for AP departments, they must also be ready for CFOs to more closely assess their performance based on key criteria such as costs, service delivery, error rates, timeliness of responses to inquiries, compliance, and vendor relationships.
This makes it imperative that AP departments continue their automation initiatives. Not only does automation help AP departments improve on-time payment performance, reduce errors, slash costs and enable greater visibility into financial data. But it also delivers the quantifiable data on process performance that CFOs will require as AP evolves into more strategic partner for their organization.
R. Edwin Pearce is executive vice president of sales and corporate development for eGistics, Inc., a provider of e-document solutions. He can be reached at 214-256-4607 or via epearce@egisticsinc.com.
Historically, if you asked a CFO to tell you the first thing that popped into their mind when you mention accounts payable (AP) processing, they likely would have responded with some variation of “cost center.” The fact is, as a percentage of revenue, the costs associated with AP processing typically represent a small blip on the radar of most companies. But as companies have tightened their spending as a result of the recent economic downturn, that blip is now a significant opportunity.
More than 75 percent of AP departments report into the CFO, according to various studies. With CFOs keenly interested in cost containment and improved cash management, AP leaders would be well served to find ways to deliver strategic benefits to the organization. Notably, 56 percent of CFOs believe AP represents a more strategic opportunity for improvements than it did two years ago.
One reason CFOs are changing their tune on AP is that they are seeking ways to avoid further layoffs, while weathering the recession. To this end, most are tightening controls over employee spending and placing greater emphasis on measuring and monitoring the company’s financial health.
These types of activities are clearly in the AP department’s wheelhouse.
CFOs are looking past the traditional paper-encumbered stereotype of AP and focusing more closely on the tremendous amount of financial data that flows through AP. From this perspective, they see AP as a means to improving working capital management, reducing supply chain risk, and greatly reducing the incidence of fraud. Most importantly, CFOs recognize that AP can help a company improve its cash position by extending days payables outstanding, avoiding late payments, capturing early-pay and volume discounts, and ensuring that payments and orders are compliant with contracts.
At many companies, AP no longer is merely a back-office transaction function where efficiency and low cost of operations are the only requisites for success; AP processes are being more tightly linked with treasury functions to help maximize working capital management. This is part of an overall move to align core processes across business functions to support corporate strategic initiatives.
While this increased corporate standing is good news for AP departments, they must also be ready for CFOs to more closely assess their performance based on key criteria such as costs, service delivery, error rates, timeliness of responses to inquiries, compliance, and vendor relationships.
This makes it imperative that AP departments continue their automation initiatives. Not only does automation help AP departments improve on-time payment performance, reduce errors, slash costs and enable greater visibility into financial data. But it also delivers the quantifiable data on process performance that CFOs will require as AP evolves into more strategic partner for their organization.
R. Edwin Pearce is executive vice president of sales and corporate development for eGistics, Inc., a provider of e-document solutions. He can be reached at 214-256-4607 or via epearce@egisticsinc.com.
Monday, November 29, 2010
Electronic Invoicing: A Dog Chasing the Car
By Tom Walker of Open Text
What is electronic invoicing? Just a simple search of the Internet provides several answers. What is the correct way to write the term … spell it out or abbreviate with a big E or little e? Does this relate to outbound invoices or inbound invoices? Is this just electronic data interchange (EDI)? I ask for your comments based on my observation below; when you hear e-invoice…what comes to mind?
For my comments, I will use e-invoice and assume it relates to inbound invoices and I will assume that SAP is the backend solution.
Invoices can be received electronically through several methods. EDI has been around for many years and seemed to have reached its peak. Most major trading partners were EDI-enabled. EDI also requires a specific internal skill set to maintain. The maturity of EDI provides a proven electronic methodology but somewhat relegated to large corporations. Both large companies and small to mid size receive invoices through direct loads from vendor website and upload of files sent from vendors. The direct link to vendors is common with purchasing cards while files uploads are common with utilities.
The thing all of these electronic methods have in common is the elimination of mail room activity and manual data entry. Another commonality is that all may still contain errors in the invoice meta data. Some consider fax or email attachment as electronic but both of these typically require first capture of the image and from that point they are handled the same as paper invoices.
There is a current trend to consider electronic invoice presentment and payment (EIPP) to be e-invoicing as provided by vendor networks. These networks accumulate invoices (typically those invoices still received by paper) from multiple Vendors and then submit them to the respective multiple clients…a many to many relationship. While these networks continue to be unique to specific providers, it is assumed they will eventually provide the ability to “roam” similar to cell phone networks.
Regardless of how a corporation receives e-invoices, it is how you process the header and line item meta data that creates significant additional value to e-invoicing. Moving from paper to e-invoice does not eliminate the vendor from providing incorrect meta data. It does not remove the labor required to correct invoice meta data, to route for approval or to report on the overall end to end processing. It does not provide the necessary process control or audit trails.
SAP not only provides the vendor network capabilities through their Crossgate solution, they also provide SAP Invoice Management which is designed to work with all forms of e-invoice.
So, not unlike the dog chasing the car, it is what you do with it when you catch it that makes the story most interesting.
What do you think?
What is electronic invoicing? Just a simple search of the Internet provides several answers. What is the correct way to write the term … spell it out or abbreviate with a big E or little e? Does this relate to outbound invoices or inbound invoices? Is this just electronic data interchange (EDI)? I ask for your comments based on my observation below; when you hear e-invoice…what comes to mind?
For my comments, I will use e-invoice and assume it relates to inbound invoices and I will assume that SAP is the backend solution.
Invoices can be received electronically through several methods. EDI has been around for many years and seemed to have reached its peak. Most major trading partners were EDI-enabled. EDI also requires a specific internal skill set to maintain. The maturity of EDI provides a proven electronic methodology but somewhat relegated to large corporations. Both large companies and small to mid size receive invoices through direct loads from vendor website and upload of files sent from vendors. The direct link to vendors is common with purchasing cards while files uploads are common with utilities.
The thing all of these electronic methods have in common is the elimination of mail room activity and manual data entry. Another commonality is that all may still contain errors in the invoice meta data. Some consider fax or email attachment as electronic but both of these typically require first capture of the image and from that point they are handled the same as paper invoices.
There is a current trend to consider electronic invoice presentment and payment (EIPP) to be e-invoicing as provided by vendor networks. These networks accumulate invoices (typically those invoices still received by paper) from multiple Vendors and then submit them to the respective multiple clients…a many to many relationship. While these networks continue to be unique to specific providers, it is assumed they will eventually provide the ability to “roam” similar to cell phone networks.
Regardless of how a corporation receives e-invoices, it is how you process the header and line item meta data that creates significant additional value to e-invoicing. Moving from paper to e-invoice does not eliminate the vendor from providing incorrect meta data. It does not remove the labor required to correct invoice meta data, to route for approval or to report on the overall end to end processing. It does not provide the necessary process control or audit trails.
SAP not only provides the vendor network capabilities through their Crossgate solution, they also provide SAP Invoice Management which is designed to work with all forms of e-invoice.
So, not unlike the dog chasing the car, it is what you do with it when you catch it that makes the story most interesting.
What do you think?
Tuesday, October 12, 2010
The Proper A/P Toolkit
By Bruce Bourdon, CPCP
Vice President, Healthcare Channel Sales Manager
U.S. Bank Corporate Payment Systems
Two key challenges face healthcare accounts payable departments today: Shrinking profit margins due to rising costs, and decreased cash flow due to slower collections and reimbursements.
The cash flow pipeline often plugs up due to an inability of the healthcare provider to extend payment terms with its top suppliers. Operational costs, meantime, have been soaring due to the high cost of printing and mailing paper checks, and often re-issuing and re-mailing checks that get lost. Finally, AP staff spent far too much time researching vendor inquiries about the status of the payment they are owed.
If any industry could stand to benefit from going paperless, it’s healthcare. Yet, a 2010 U.S. Bank/IAPP survey showed that 61 percent of all healthcare payments today are made by paper check. A similar survey, this one by PayStream Advisors in late 2009, found that 68 percent of all invoices are traded by paper, and only about 25 percent of all purchase orders are sent electronically to suppliers.
That’s about to change. The U.S. Bank/IAPP survey that showed such a high rate of paper check payments also predicts a 2/3 reduction in check payments and a three-fold increase in use of purchasing cards over the next three years, based on feedback from respondents.
Some may wonder, what is taking the healthcare industry so long to jump on the technology conversion bandwagon? The answer: it is hampered by many of the same roadblocks being experienced by other industries. Namely, perceived external barriers such as limited willingness or capability of suppliers to handle e-payments, and perceived internal barriers such as the high cost of conversion to e-payments or worries about their own capability to manage the transition.
Such concerns are often overblown. The cost of conversion, for example, is dwarfed by the savings realized over time, according to recent studies. To the extent that it’s measured at all, cost-per-paper-invoice can vary from a dollar to over $15 dollars, says the PayStream Advisors survey. But interestingly enough about half the companies surveyed have no idea what it’s costing them to process each paper invoice.
Electronic processing makes the costs much more transparent and easier to measure, therefore making it easier to spot the cost bottlenecks and act upon them. Aberdeen Group has shown that electronic invoice processing shaves $6 to $7 off the cost or processing each invoice. How? By accelerating the approval cycle, reducing the number of lost and missing invoices, reducing the number of “exceptions” and, ultimately, reducing FTE or allowing redirection of work into more value-added activities.
Annapolis Consulting puts it this way: Automation increases ease of use, ease of use increases adoption, adoption increases on-contract spend, on contract spend enhances visibility and visibility reduces wasteful spend. Just as important, visibility enhances leverage when it comes time to negotiate contracts with suppliers.
Today’s payables toolkit brims with options for the healthcare provider, from Electronic Invoice Presentment and Payment (EIPP) to a wide array of paperless e-payment options including commercial cards, virtual or “ghost” card accounts, wire payments and Automated Clearinghouse (ACH). End-to-end automation is both possible and achievable. It’s easier than ever to establish e-payments as the standard for conducting business with your key suppliers.
Vice President, Healthcare Channel Sales Manager
U.S. Bank Corporate Payment Systems
Two key challenges face healthcare accounts payable departments today: Shrinking profit margins due to rising costs, and decreased cash flow due to slower collections and reimbursements.
The cash flow pipeline often plugs up due to an inability of the healthcare provider to extend payment terms with its top suppliers. Operational costs, meantime, have been soaring due to the high cost of printing and mailing paper checks, and often re-issuing and re-mailing checks that get lost. Finally, AP staff spent far too much time researching vendor inquiries about the status of the payment they are owed.
If any industry could stand to benefit from going paperless, it’s healthcare. Yet, a 2010 U.S. Bank/IAPP survey showed that 61 percent of all healthcare payments today are made by paper check. A similar survey, this one by PayStream Advisors in late 2009, found that 68 percent of all invoices are traded by paper, and only about 25 percent of all purchase orders are sent electronically to suppliers.
That’s about to change. The U.S. Bank/IAPP survey that showed such a high rate of paper check payments also predicts a 2/3 reduction in check payments and a three-fold increase in use of purchasing cards over the next three years, based on feedback from respondents.
Some may wonder, what is taking the healthcare industry so long to jump on the technology conversion bandwagon? The answer: it is hampered by many of the same roadblocks being experienced by other industries. Namely, perceived external barriers such as limited willingness or capability of suppliers to handle e-payments, and perceived internal barriers such as the high cost of conversion to e-payments or worries about their own capability to manage the transition.
Such concerns are often overblown. The cost of conversion, for example, is dwarfed by the savings realized over time, according to recent studies. To the extent that it’s measured at all, cost-per-paper-invoice can vary from a dollar to over $15 dollars, says the PayStream Advisors survey. But interestingly enough about half the companies surveyed have no idea what it’s costing them to process each paper invoice.
Electronic processing makes the costs much more transparent and easier to measure, therefore making it easier to spot the cost bottlenecks and act upon them. Aberdeen Group has shown that electronic invoice processing shaves $6 to $7 off the cost or processing each invoice. How? By accelerating the approval cycle, reducing the number of lost and missing invoices, reducing the number of “exceptions” and, ultimately, reducing FTE or allowing redirection of work into more value-added activities.
Annapolis Consulting puts it this way: Automation increases ease of use, ease of use increases adoption, adoption increases on-contract spend, on contract spend enhances visibility and visibility reduces wasteful spend. Just as important, visibility enhances leverage when it comes time to negotiate contracts with suppliers.
Today’s payables toolkit brims with options for the healthcare provider, from Electronic Invoice Presentment and Payment (EIPP) to a wide array of paperless e-payment options including commercial cards, virtual or “ghost” card accounts, wire payments and Automated Clearinghouse (ACH). End-to-end automation is both possible and achievable. It’s easier than ever to establish e-payments as the standard for conducting business with your key suppliers.
Thursday, September 30, 2010
Healthcare Payables: From Bad to Worse?
By Amer Khan (akhan@egisticsinc.com) of eGistics (www.egisticsinc.com)
Effectively managing the payables process is a big job for most companies, but for healthcare organizations, it is a particularly tall order -- and it's about to get a lot more challenging.
The problem in managing healthcare payables stems from the byzantine network of buyer and seller relationships employed by most healthcare organizations, combined with the increasingly complex procurement processes and contracts that healthcare organizations use to purchase goods and services. Every day, the typical healthcare organization receives a mountain of invoices from many different suppliers, most under different contracts with potentially different payment arrangements.
When you mix in the unusually high number of suppliers that most healthcare organizations use -- a hospital might have thousands of suppliers compared to a few dozen for a big law firm -- you can see how the payables process can quickly become complicated. For instance, on a given day, a hospital might receive invoices for everything from Band-Aids to the pricey cardiology equipment it leases.
The healthcare industry's attempts to address the inefficiencies of the payables continuum have delivered mixed results. Several years ago, group purchasing organizations (GPOs) started sprouting up, allowing healthcare organizations to buy a range of goods and services from a single entity, rather than dealing with multiple vendors. While GPOs have enabled their customers to maximize discounts and reduce the number of vendors they do business with, there are still many cases where healthcare providers must source goods and services directly (such as buying from local suppliers), meaning they still must maintain a high number of supplier relationships.
Here's the scary part: the problem is likely to get worse. Every innovation in the healthcare industry -- whether it's new technologies, new devices or new drugs -- may create more suppliers, generating more invoices, contracts, payment arrangements, and, in some cases, acquisition channels. With our nation focusing like never before on innovations in healthcare, providers have no time to waste.
And while healthcare organizations are focusing tremendous amounts of time and resources on "big issues" such as meeting new requirements for electronic health records (EHRs) and ICD-10, driving down the costs associated with payables can deliver significant benefits as well, and in short order.
So, how can healthcare organizations accomplish this?
Since manual processes don't scale, the healthcare industry will need to rethink its approach to payables. The answer starts with eliminating paper at the earliest point possible in the process.
Whether it's converting paper invoices to electronic images, or convincing business partners to provide electronic invoices in the first place, eliminating paper simplifies and automates the payables process. It allows healthcare providers to apply automated rules for processing, and to initiate an electronic payment with detailed remittance information so the supplier can automatically post the receivables. With these types of solutions, providers can solve their current business challenges and lay a solid foundation to manage the increasingly complex payable environment that is sure to come.
What do you think?
Effectively managing the payables process is a big job for most companies, but for healthcare organizations, it is a particularly tall order -- and it's about to get a lot more challenging.
The problem in managing healthcare payables stems from the byzantine network of buyer and seller relationships employed by most healthcare organizations, combined with the increasingly complex procurement processes and contracts that healthcare organizations use to purchase goods and services. Every day, the typical healthcare organization receives a mountain of invoices from many different suppliers, most under different contracts with potentially different payment arrangements.
When you mix in the unusually high number of suppliers that most healthcare organizations use -- a hospital might have thousands of suppliers compared to a few dozen for a big law firm -- you can see how the payables process can quickly become complicated. For instance, on a given day, a hospital might receive invoices for everything from Band-Aids to the pricey cardiology equipment it leases.
The healthcare industry's attempts to address the inefficiencies of the payables continuum have delivered mixed results. Several years ago, group purchasing organizations (GPOs) started sprouting up, allowing healthcare organizations to buy a range of goods and services from a single entity, rather than dealing with multiple vendors. While GPOs have enabled their customers to maximize discounts and reduce the number of vendors they do business with, there are still many cases where healthcare providers must source goods and services directly (such as buying from local suppliers), meaning they still must maintain a high number of supplier relationships.
Here's the scary part: the problem is likely to get worse. Every innovation in the healthcare industry -- whether it's new technologies, new devices or new drugs -- may create more suppliers, generating more invoices, contracts, payment arrangements, and, in some cases, acquisition channels. With our nation focusing like never before on innovations in healthcare, providers have no time to waste.
And while healthcare organizations are focusing tremendous amounts of time and resources on "big issues" such as meeting new requirements for electronic health records (EHRs) and ICD-10, driving down the costs associated with payables can deliver significant benefits as well, and in short order.
So, how can healthcare organizations accomplish this?
Since manual processes don't scale, the healthcare industry will need to rethink its approach to payables. The answer starts with eliminating paper at the earliest point possible in the process.
Whether it's converting paper invoices to electronic images, or convincing business partners to provide electronic invoices in the first place, eliminating paper simplifies and automates the payables process. It allows healthcare providers to apply automated rules for processing, and to initiate an electronic payment with detailed remittance information so the supplier can automatically post the receivables. With these types of solutions, providers can solve their current business challenges and lay a solid foundation to manage the increasingly complex payable environment that is sure to come.
What do you think?
Wednesday, September 22, 2010
Health Reform’s Impact on AP Costs
Posted by Mark Brousseau
The new federal health reform law will drive accounts payable (AP) costs higher over the next two years according to industry stakeholders who responded to a survey at this week’s IAPP-TAWPI Healthcare Payments Automation Summit (HPAS) in Boston. The survey was conducted during the conference by IAPP-TAWPI, APQC and PRGX. Survey respondents included healthcare payers and providers; third-party services providers (such as medical billing firms); banks; and IT vendors.
More than half (51.9 percent) of the HPAS attendees who responded to the survey predicted that health reform will result in higher AP costs over the next two years, while 48.1 percent of survey respondents said that AP costs will remain unchanged. None of the conference attendees that responded to the survey believe that short-term AP costs will decrease as a result of health reform.
HPAS attendees who responded to the survey were more divided on the long-term impact of health reform on AP costs. More than one-third (36.2 percent) of survey respondents believe that health reform will drive AP costs higher long-term (defined in the survey as over two years from now), while an equal percentage of respondents believe AP costs will remain unchanged. On the bright side, 27.7 percent of respondents predicted that health reform will result in lower AP costs long-term.
Among the other findings of the HPAS survey:
… Data integration, processing performance, and integration of physician data were the top healthcare AP challenges identified by respondents, followed by cost pressures, manual data entry (which drives costs up), and the ability to track and report evidence-based improvements in cost.
… Most survey respondents (57.7 percent) believe that health reform will have no impact on AP processing performance over the next two years, while a plurality of respondents (39.6 percent) predicted that health reform will result in lower AP processing performance long-term.
… Nearly two-thirds (64 percent) of survey respondents believe that health reform will have no impact on AP late payments and error rates. Long-term, survey respondents were more divided, with a plurality (38.3 percent) predicting that health reform will have no impact on AP late payments and error rates, 31.9 percent predicting that health reform will result in more AP late payments and errors, and 29.8 percent predicting that health reform will help decrease AP late payments and errors.
… HPAS attendees are not optimistic about health reform’s impact on IT systems costs. Nearly two-thirds (62.3 percent) of respondents believe that health reform will drive IT systems costs higher over the next two years, while 37.7 percent of respondents predicted that systems costs would remain unchanged. None of the respondents believe that health reform will result in lower systems costs over the next two years. Long-term, half of the survey respondents believe that health reform will result in higher overall IT systems costs, while 18.8 percent believe IT systems costs will decrease. About one- third (31.3 percent) of respondents predicted that systems costs will remain unchanged.
“Big changes are coming in healthcare, and AP organizations must ask themselves if they are ready,” APQC Analyst Neville Sokol told HPAS attendees. “At times like these, organizations are turning to data and best practices to help them solve problems, improve processes, or design something better. These tools can help make sense of a complex world, and provide a roadmap for moving forward.”
The new federal health reform law will drive accounts payable (AP) costs higher over the next two years according to industry stakeholders who responded to a survey at this week’s IAPP-TAWPI Healthcare Payments Automation Summit (HPAS) in Boston. The survey was conducted during the conference by IAPP-TAWPI, APQC and PRGX. Survey respondents included healthcare payers and providers; third-party services providers (such as medical billing firms); banks; and IT vendors.
More than half (51.9 percent) of the HPAS attendees who responded to the survey predicted that health reform will result in higher AP costs over the next two years, while 48.1 percent of survey respondents said that AP costs will remain unchanged. None of the conference attendees that responded to the survey believe that short-term AP costs will decrease as a result of health reform.
HPAS attendees who responded to the survey were more divided on the long-term impact of health reform on AP costs. More than one-third (36.2 percent) of survey respondents believe that health reform will drive AP costs higher long-term (defined in the survey as over two years from now), while an equal percentage of respondents believe AP costs will remain unchanged. On the bright side, 27.7 percent of respondents predicted that health reform will result in lower AP costs long-term.
Among the other findings of the HPAS survey:
… Data integration, processing performance, and integration of physician data were the top healthcare AP challenges identified by respondents, followed by cost pressures, manual data entry (which drives costs up), and the ability to track and report evidence-based improvements in cost.
… Most survey respondents (57.7 percent) believe that health reform will have no impact on AP processing performance over the next two years, while a plurality of respondents (39.6 percent) predicted that health reform will result in lower AP processing performance long-term.
… Nearly two-thirds (64 percent) of survey respondents believe that health reform will have no impact on AP late payments and error rates. Long-term, survey respondents were more divided, with a plurality (38.3 percent) predicting that health reform will have no impact on AP late payments and error rates, 31.9 percent predicting that health reform will result in more AP late payments and errors, and 29.8 percent predicting that health reform will help decrease AP late payments and errors.
… HPAS attendees are not optimistic about health reform’s impact on IT systems costs. Nearly two-thirds (62.3 percent) of respondents believe that health reform will drive IT systems costs higher over the next two years, while 37.7 percent of respondents predicted that systems costs would remain unchanged. None of the respondents believe that health reform will result in lower systems costs over the next two years. Long-term, half of the survey respondents believe that health reform will result in higher overall IT systems costs, while 18.8 percent believe IT systems costs will decrease. About one- third (31.3 percent) of respondents predicted that systems costs will remain unchanged.
“Big changes are coming in healthcare, and AP organizations must ask themselves if they are ready,” APQC Analyst Neville Sokol told HPAS attendees. “At times like these, organizations are turning to data and best practices to help them solve problems, improve processes, or design something better. These tools can help make sense of a complex world, and provide a roadmap for moving forward.”
Monday, July 5, 2010
How to communicate without saying a word
Posted by Tom Walker, portfolio manager, SAP Accounts Payable Solution, Open Text Corporation:
How to communication without saying a word?
This can be a difficult challenge in the world of Accounts Payable when working to post invoices accurately and quickly. Just accurately and quickly alone is a major task but when you add “quietly”…is it really possible?
Think of all the people involved…Accounts Payable Professionals, Approvers, Corporate Procurement, Field Procurement, Receiving, Contract Management, Master Data Management, Tax Professionals…just to name a few. There are a number of Vendors offering solutions to address the accurate and quick...although in many cases you have to decide…do you want it accurate or quick…one or the other but not both. Yet very few address the quietly issue.
Why is this important? For invoices that are received and immediately posted without any human intervention due to issues such as problem resolution or approval, communication is not a critical factor. Yet when that 80/20 rule kicks in where 20% of your invoices result in 80% of the problems, the Accounts Payable Professional must reach out and communicate. They need to communicate with the individuals that have both the knowledge and security authorization to resolve / approve invoices as required by best practice separation of duties.
As an example, in an ERP such as SAP this communication is often started by running a report such as MRBR to find invoices blocked for payment. Without a solution that includes “quietly” as a building block, the first communication triggers a barrage of activity including but not limited to emails, phone calls, entries into spreadsheets for follow up, follow up calls, making copies of invoices and pulling contracts.
So how do you add “quietly” to the process flow? You must examine the entire process flow from how you receive the invoice, how you capture the meta data at the header and line item level, how you determine if there is a problem and then who must be involved to resolve / approve. Equally important is anticipate what that person requires to complete the task…such as…access to invoice and related document images, history of others that have worked on the process including their comments, transactional data such as purchase order, goods receipt, prior postings to purchase order and options to resolution / approval.
One excellent example of a “quite” solution is provided by SAP with their SAP Invoice Management and optional OCR.
One last thought…quiet extends to reporting also…you need to anticipate the need for information related to the invoice. While invoice payment status is certainly important you must also anticipate others will want to know trends such as invoices paid without problem and if a problem…what type of problem is most common. Yet a truly quiet process goes beyond the expected reporting…the invoice occurred because of a purchase…the purchase occurred due to a larger business process such as a building project and so on. You must anticipate that others must be able to see the invoice as part of the bigger picture.
This bigger picture is ECM. You would expect that a large ERP would anticipate this more holistic requirement and SAP has also done that by providing an ECM solution through it partnership with Open Text that takes the invoice and quietly makes it available as part of the ECM big picture. This allows you to see for example all the invoices from one vendor on one project in one virtual view or to see all the invoices related to the project regardless of vendor. No longer is it required to communicate and ask the Accounts Payable Professional to accumulate all the related information and wait for a response…it is already waiting for you to access immediate and quietly.
So…accurate…quick…quiet…yes it is possible!
How to communication without saying a word?
This can be a difficult challenge in the world of Accounts Payable when working to post invoices accurately and quickly. Just accurately and quickly alone is a major task but when you add “quietly”…is it really possible?
Think of all the people involved…Accounts Payable Professionals, Approvers, Corporate Procurement, Field Procurement, Receiving, Contract Management, Master Data Management, Tax Professionals…just to name a few. There are a number of Vendors offering solutions to address the accurate and quick...although in many cases you have to decide…do you want it accurate or quick…one or the other but not both. Yet very few address the quietly issue.
Why is this important? For invoices that are received and immediately posted without any human intervention due to issues such as problem resolution or approval, communication is not a critical factor. Yet when that 80/20 rule kicks in where 20% of your invoices result in 80% of the problems, the Accounts Payable Professional must reach out and communicate. They need to communicate with the individuals that have both the knowledge and security authorization to resolve / approve invoices as required by best practice separation of duties.
As an example, in an ERP such as SAP this communication is often started by running a report such as MRBR to find invoices blocked for payment. Without a solution that includes “quietly” as a building block, the first communication triggers a barrage of activity including but not limited to emails, phone calls, entries into spreadsheets for follow up, follow up calls, making copies of invoices and pulling contracts.
So how do you add “quietly” to the process flow? You must examine the entire process flow from how you receive the invoice, how you capture the meta data at the header and line item level, how you determine if there is a problem and then who must be involved to resolve / approve. Equally important is anticipate what that person requires to complete the task…such as…access to invoice and related document images, history of others that have worked on the process including their comments, transactional data such as purchase order, goods receipt, prior postings to purchase order and options to resolution / approval.
One excellent example of a “quite” solution is provided by SAP with their SAP Invoice Management and optional OCR.
One last thought…quiet extends to reporting also…you need to anticipate the need for information related to the invoice. While invoice payment status is certainly important you must also anticipate others will want to know trends such as invoices paid without problem and if a problem…what type of problem is most common. Yet a truly quiet process goes beyond the expected reporting…the invoice occurred because of a purchase…the purchase occurred due to a larger business process such as a building project and so on. You must anticipate that others must be able to see the invoice as part of the bigger picture.
This bigger picture is ECM. You would expect that a large ERP would anticipate this more holistic requirement and SAP has also done that by providing an ECM solution through it partnership with Open Text that takes the invoice and quietly makes it available as part of the ECM big picture. This allows you to see for example all the invoices from one vendor on one project in one virtual view or to see all the invoices related to the project regardless of vendor. No longer is it required to communicate and ask the Accounts Payable Professional to accumulate all the related information and wait for a response…it is already waiting for you to access immediate and quietly.
So…accurate…quick…quiet…yes it is possible!
Sunday, May 9, 2010
FUSION 2010
Posted by Mark Brousseau
During an interactive networking luncheon today at FUSION 2010 at the Gaylord Texan Resort & Convention Center in Grapevine, Texas, attendees shared the best operations tips that they have implemented in the past year. Below are some of the top operations tips shared by attendees:
• Develop an AP Roadshow to visit different departments and operations sites to explain what AP does, what information it needs to do its job effectively, and how departments can work with AP.
• Implement a document imaging and retrieval system for finance documents. Having instant access to document images helped one company eliminate one full-time equivalent.
• Integrate TIN Matching with Oracle.
• Scan your invoices!
• Scan AP documents on the front-end, not the back-end, to achieve more workflow efficiencies.
• Combine your travel and entertainment (T&E) and purchasing card into one card to reduce administration and capture more rebates.
• Leverage remote deposit capture to eliminate trips to the bank.
• Automate, automate, automate!
• Do away with paper checks for T&E. Use debit cards for employees without bank accounts.
• If you have international travelers, educate them on VAT reclamation requirements.
• Trust is not a control! A “trusted employee” could be stealing from your company.
• When choosing a software solution, ask how they initiates upgrades or you might find yourself back at square one. Also understand whether the vendor will convert existing data.
• Eliminate, automate, delegate -- EAD!
• Eliminate as much paper as possible from your workflow.
• Whenever you are implementing new technologies or processes, be sure to get buy-in from line-level staff.
• Strive for open communication with your staff.
• Learn to walk away!
During an interactive networking luncheon today at FUSION 2010 at the Gaylord Texan Resort & Convention Center in Grapevine, Texas, attendees shared the best operations tips that they have implemented in the past year. Below are some of the top operations tips shared by attendees:
• Develop an AP Roadshow to visit different departments and operations sites to explain what AP does, what information it needs to do its job effectively, and how departments can work with AP.
• Implement a document imaging and retrieval system for finance documents. Having instant access to document images helped one company eliminate one full-time equivalent.
• Integrate TIN Matching with Oracle.
• Scan your invoices!
• Scan AP documents on the front-end, not the back-end, to achieve more workflow efficiencies.
• Combine your travel and entertainment (T&E) and purchasing card into one card to reduce administration and capture more rebates.
• Leverage remote deposit capture to eliminate trips to the bank.
• Automate, automate, automate!
• Do away with paper checks for T&E. Use debit cards for employees without bank accounts.
• If you have international travelers, educate them on VAT reclamation requirements.
• Trust is not a control! A “trusted employee” could be stealing from your company.
• When choosing a software solution, ask how they initiates upgrades or you might find yourself back at square one. Also understand whether the vendor will convert existing data.
• Eliminate, automate, delegate -- EAD!
• Eliminate as much paper as possible from your workflow.
• Whenever you are implementing new technologies or processes, be sure to get buy-in from line-level staff.
• Strive for open communication with your staff.
• Learn to walk away!
Tuesday, May 4, 2010
FUSION Preview
Posted by Mark Brousseau
Join me Wednesday, May 12 at 3:15 for an interactive panel discussion that will drill down into the findings of a groundbreaking AP Benchmarking Survey from International Accounts Payables Professionals (IAPP), American Productivity and Quality Center (APQC), and PRGX.
Our panelists will offer their insights on the findings, as well as advice on what AP operations should do to become top performers themselves. Topics covered will include automation strategies, AP best practices, and the business models with the biggest payoff. You might be surprised by the findings! There will be plenty of opportunity for attendees to ask questions and share their own strategies for AP effectiveness and efficiency.
Moderator:
Mark Brousseau, Brousseau and Associates
Panelists:
Tom Bohn, CEO, IAPP/IARP
Evert Hulleman, Managing Director, Advisory Services, PRGX USA, Inc.
Neville Sokol, Sr. Advisor Research Services, APQC
Join me Wednesday, May 12 at 3:15 for an interactive panel discussion that will drill down into the findings of a groundbreaking AP Benchmarking Survey from International Accounts Payables Professionals (IAPP), American Productivity and Quality Center (APQC), and PRGX.
Our panelists will offer their insights on the findings, as well as advice on what AP operations should do to become top performers themselves. Topics covered will include automation strategies, AP best practices, and the business models with the biggest payoff. You might be surprised by the findings! There will be plenty of opportunity for attendees to ask questions and share their own strategies for AP effectiveness and efficiency.
Moderator:
Mark Brousseau, Brousseau and Associates
Panelists:
Tom Bohn, CEO, IAPP/IARP
Evert Hulleman, Managing Director, Advisory Services, PRGX USA, Inc.
Neville Sokol, Sr. Advisor Research Services, APQC
FUSION Preview
Posted by Mark Brousseau
They say breakfast is the most important meal of the day.
In this case, it is critical to the future success of your AP operation.
Join IAPP CEO Tom Bohn and PRGX President and CEO Romil Bahl at 7:45 a.m. on Tuesday, May 11, as they unveil the results of a groundbreaking new tool for measuring the efficiency and effectiveness of AP operations.
The AP Productivity Index, developed by IAPP, PRGX and APQC, is the first tool of its kind to gauge the impact of AP metrics such as cost, staff productivity, turnaround time, and error rates.
During this breakfast presentation, Bahl will share the findings of the index, providing qualitative information on the practices, business models and attributes of AP Top Performers. The results may surprise you! Bahl also will arm CFOs and AP leaders with questions they can take back to their operations to identify areas for improvement. You'll also learn how you can participate in the index.
So set your alarm, and set your future success in motion!
They say breakfast is the most important meal of the day.
In this case, it is critical to the future success of your AP operation.
Join IAPP CEO Tom Bohn and PRGX President and CEO Romil Bahl at 7:45 a.m. on Tuesday, May 11, as they unveil the results of a groundbreaking new tool for measuring the efficiency and effectiveness of AP operations.
The AP Productivity Index, developed by IAPP, PRGX and APQC, is the first tool of its kind to gauge the impact of AP metrics such as cost, staff productivity, turnaround time, and error rates.
During this breakfast presentation, Bahl will share the findings of the index, providing qualitative information on the practices, business models and attributes of AP Top Performers. The results may surprise you! Bahl also will arm CFOs and AP leaders with questions they can take back to their operations to identify areas for improvement. You'll also learn how you can participate in the index.
So set your alarm, and set your future success in motion!
FUSION Preview
Posted by Mark Brousseau
Coming to Dallas early for FUSION 2010?
Join me for a special networking lunch on Sunday, May 9, beginning at 11:30 a.m. in Dallas 6 and 7 at the Gaylord Texan Resort & Convention Center. The lunch is open to all FUSION registrants.
During this complimentary lunch, you will have an opportunity to meet other FUSION attendees in a casual and comfortable setting -- and take away some great tips for improving your operations.
Prizes also will be awarded.
Have lunch with us and get your FUSION experience off to a great start!
Coming to Dallas early for FUSION 2010?
Join me for a special networking lunch on Sunday, May 9, beginning at 11:30 a.m. in Dallas 6 and 7 at the Gaylord Texan Resort & Convention Center. The lunch is open to all FUSION registrants.
During this complimentary lunch, you will have an opportunity to meet other FUSION attendees in a casual and comfortable setting -- and take away some great tips for improving your operations.
Prizes also will be awarded.
Have lunch with us and get your FUSION experience off to a great start!
Wednesday, April 28, 2010
TAWPI @ NACHA Payments
today Magazine Editor Mark Brousseau looks on as J&B Software's Mike Packer demonstrates the vendor's Mobile Deposit solution at NACHA's Payments 2010 at the Washington State Convention Center in Seattle.
AR professionals expect a better 2010
OB10, the leading global e-Invoicing network, and International Accounts Receivable Professionals (IARP), a not-for-profit guidance-setting association for the accounts receivable profession, conducted a recent survey of accounts receivable professionals designed to gauge current business practices and the future state of organizations from an accounts receivable and collections perspective.
Results of the survey, which will be conducted annually, indicate that AR professionals are taking a number of steps to ensure more predictable payment from customers while predicting a general improvement in their organization’s overall economic situation in 2010. Survey participants included presidents, CEOs, owners, CFOs, AR directors and AR managers from organizations across a broad spectrum of industries and sizes.
“The results of the survey provide very strong insight into the current invoicing and collections practices of AR professionals and give a glimpse of where they are going to direct their efforts and resources in the future to ensure more predictable cash flow,” said Thayer Stewart, Vice President of Marketing for OB10. Although generally satisfied with their collections results, 41 percent of respondents have increased their collections efforts and slightly more than half have been contacting their customers more frequently in order to receive payment. Furthermore, in light of the increased collections activities, 71 percent of respondents said they had received requests from their customers in 2009 to invoice them electronically, with 42 percent saying they had received more requests in 2009 than in previous years. AR professionals view this positively, as 82 percent who received requests believe that submitting invoices electronically expedites the collections process.”
The survey also asked AR professionals to indicate the average number of days it takes their customers to pay them once an invoice has been submitted. The result was an average Days Sales Outstanding (DSO) number of 36.1 days, with 69 percent of respondents citing that their invoices are paid between 26 and 50 days after submitted to their customers.
“Almost two-thirds of the AR professionals we polled told us that 2009 was worse than or about the same as 2008 financially,” said IARP CEO Tom Bohn., “However, the outlook going forward is increasingly positive, as almost 60 percent of respondents said they believe their businesses will do better financially in 2010 compared to 2009. Of those expressing optimism, 63 percent say they have a positive outlook because their companies have become more focused in their sales and marketing efforts, 61 percent said they have been more successful in reducing costs and 58 percent say they expect the economy to rebound.”
To read more about the results of the 2010 OB10-IARP Accounts Receivable Survey, download the executive summary as well as the full report from the OB10 and IARP Web sites at http://OB10.com/ARSurvey or http://www.theiarp.org/ViewItem-324.do?parentCatId=219 respectively.
Results of the survey, which will be conducted annually, indicate that AR professionals are taking a number of steps to ensure more predictable payment from customers while predicting a general improvement in their organization’s overall economic situation in 2010. Survey participants included presidents, CEOs, owners, CFOs, AR directors and AR managers from organizations across a broad spectrum of industries and sizes.
“The results of the survey provide very strong insight into the current invoicing and collections practices of AR professionals and give a glimpse of where they are going to direct their efforts and resources in the future to ensure more predictable cash flow,” said Thayer Stewart, Vice President of Marketing for OB10. Although generally satisfied with their collections results, 41 percent of respondents have increased their collections efforts and slightly more than half have been contacting their customers more frequently in order to receive payment. Furthermore, in light of the increased collections activities, 71 percent of respondents said they had received requests from their customers in 2009 to invoice them electronically, with 42 percent saying they had received more requests in 2009 than in previous years. AR professionals view this positively, as 82 percent who received requests believe that submitting invoices electronically expedites the collections process.”
The survey also asked AR professionals to indicate the average number of days it takes their customers to pay them once an invoice has been submitted. The result was an average Days Sales Outstanding (DSO) number of 36.1 days, with 69 percent of respondents citing that their invoices are paid between 26 and 50 days after submitted to their customers.
“Almost two-thirds of the AR professionals we polled told us that 2009 was worse than or about the same as 2008 financially,” said IARP CEO Tom Bohn., “However, the outlook going forward is increasingly positive, as almost 60 percent of respondents said they believe their businesses will do better financially in 2010 compared to 2009. Of those expressing optimism, 63 percent say they have a positive outlook because their companies have become more focused in their sales and marketing efforts, 61 percent said they have been more successful in reducing costs and 58 percent say they expect the economy to rebound.”
To read more about the results of the 2010 OB10-IARP Accounts Receivable Survey, download the executive summary as well as the full report from the OB10 and IARP Web sites at http://OB10.com/ARSurvey or http://www.theiarp.org/ViewItem-324.do?parentCatId=219 respectively.
Friday, April 23, 2010
Customer loyalty to banks drops significantly
Posted by Mark Brousseau
While the U.S. economy may be showing signs of a modest recovery, retail banks continue to struggle with their most basic mission: satisfying customers. In fact, a recent consumer survey reveals that overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale, primarily due to low marks in customer service, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study.
To gauge consumer attitudes, J.D. Power recently surveyed nearly 48,000 retail bank customers across the United States. Respondents were asked to rate their bank on a variety of topics encompassing account activities; account information; bank facility; fees; problem resolution; and product offerings.
Results of the study show that poor customer service is the most common reason why customers switched banks in 2010. According to the study, 37 percent of customers who changed their primary banking relationship in 2010 did so because of poor customer service at their previous bank. This represents a real missed opportunity for banks, according to the study.
“As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of the banking practice at J.D. Power and Associates. “Banks who get back to the basics—such as maintaining a clean branch and greeting customers as they enter the branch—may help to alleviate some of the distress customers are feeling and increase overall satisfaction.”
Performing simple service acts such as greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points. However, less than one-half of customers reported experiencing those services.
Loyalty suffers
J.D. Power and Associates research indicates a clear connection between customer satisfaction and customer loyalty. Generally speaking, satisfied customers are loyal customers. On the flipside, customers who report lower levels of satisfaction are much more likely to switch service providers, no matter the industry.
According to the study, expressed loyalty to banks, which is measured by the percentage of customers saying they will “definitely not switch” in the next 12 months, has fallen significantly during the past three years. It was only 34 percent in 2010, compared with 46 percent in 2007. Further, the gap between larger and smaller banks is considerable, with 40 percent of customers at smaller banks reporting that they will definitely not switch, compared with 33 percent at larger banks.
High fees often cited as reason for switching
Fees continue to have a major impact on customer loyalty, as well. According to the study, 29 percent of customers who switched banks in 2010 cited high fees as their reason for leaving. The study also finds that customers can be highly satisfied even when paying fees, provided that they receive sufficient value for the price paid. Fee-paying customers with above-average fee satisfaction indicate better experiences with branch access and appearance, promptness of being served, and the bank’s Web site navigation and range of services.
“While fees have a significant impact on customer satisfaction, banks can mitigate this effect by giving the customer choices,” said Beird. “Customers tend to be considerably less dissatisfied when they have different overdraft options, such as transferring from a savings account or sending a balance alert.”
The way customers bank is changing
As technology continues to infiltrate every aspect of daily life, banks too need to adapt to changing customer preferences. According to the study, 51 percent of customers report a preference to bank online—an increase from 44 percent in 2008. In addition, 7 percent of customers report using a mobile device to check balances, transfer funds, and pay bills.
What do you think?
While the U.S. economy may be showing signs of a modest recovery, retail banks continue to struggle with their most basic mission: satisfying customers. In fact, a recent consumer survey reveals that overall satisfaction of retail banking customers has decreased for a fourth consecutive year, to 748 on 1,000-point scale, primarily due to low marks in customer service, according to the J.D. Power and Associates 2010 U.S. Retail Banking Satisfaction Study.
To gauge consumer attitudes, J.D. Power recently surveyed nearly 48,000 retail bank customers across the United States. Respondents were asked to rate their bank on a variety of topics encompassing account activities; account information; bank facility; fees; problem resolution; and product offerings.
Results of the study show that poor customer service is the most common reason why customers switched banks in 2010. According to the study, 37 percent of customers who changed their primary banking relationship in 2010 did so because of poor customer service at their previous bank. This represents a real missed opportunity for banks, according to the study.
“As retail banking customers become considerably less loyal, banks need to focus on getting the fundamentals right,” said Michael Beird, director of the banking practice at J.D. Power and Associates. “Banks who get back to the basics—such as maintaining a clean branch and greeting customers as they enter the branch—may help to alleviate some of the distress customers are feeling and increase overall satisfaction.”
Performing simple service acts such as greeting customers as they enter the branch, offering additional assistance, and thanking them for their business may increase overall satisfaction by nearly 50 index points. However, less than one-half of customers reported experiencing those services.
Loyalty suffers
J.D. Power and Associates research indicates a clear connection between customer satisfaction and customer loyalty. Generally speaking, satisfied customers are loyal customers. On the flipside, customers who report lower levels of satisfaction are much more likely to switch service providers, no matter the industry.
According to the study, expressed loyalty to banks, which is measured by the percentage of customers saying they will “definitely not switch” in the next 12 months, has fallen significantly during the past three years. It was only 34 percent in 2010, compared with 46 percent in 2007. Further, the gap between larger and smaller banks is considerable, with 40 percent of customers at smaller banks reporting that they will definitely not switch, compared with 33 percent at larger banks.
High fees often cited as reason for switching
Fees continue to have a major impact on customer loyalty, as well. According to the study, 29 percent of customers who switched banks in 2010 cited high fees as their reason for leaving. The study also finds that customers can be highly satisfied even when paying fees, provided that they receive sufficient value for the price paid. Fee-paying customers with above-average fee satisfaction indicate better experiences with branch access and appearance, promptness of being served, and the bank’s Web site navigation and range of services.
“While fees have a significant impact on customer satisfaction, banks can mitigate this effect by giving the customer choices,” said Beird. “Customers tend to be considerably less dissatisfied when they have different overdraft options, such as transferring from a savings account or sending a balance alert.”
The way customers bank is changing
As technology continues to infiltrate every aspect of daily life, banks too need to adapt to changing customer preferences. According to the study, 51 percent of customers report a preference to bank online—an increase from 44 percent in 2008. In addition, 7 percent of customers report using a mobile device to check balances, transfer funds, and pay bills.
What do you think?
Wednesday, April 14, 2010
Great Expectations (And How to Manage Them)
Posted by Mark Brousseau
Getting the most out of an AP automation project has a lot to do with managing expectations. Jim Thumma (jthumma@docfinity.com), vice president of sales and marketing for Optical Image Technology, Inc. (OIT), explains:
The greatest barriers to successful AP automation are the same as the obstacles to implementing any new technology solution: the failure to manage people and their expectations.
Rarely does an automation project fail because of inadequate technology. The software that is used for automation today, as well as the hardware that supports it, is mature. Although technology continues to improve, many solutions in the marketplace today are fundamentally strong, reliable, secure, and consistent.
Problems typically surface―and projects sometimes fail―because of people’s mindsets and management’s lack of preparedness to help them to change. Many workers resist changing from something familiar to something new, even if the solution offers better tools than the ones they currently use. After all, as the saying goes, the devil you know is better than the one that’s unseen. At least the old way of doing things is familiar.
If you want to move your people from resistance toward acceptance (and ultimately enthusiastic support) of AP automation or any other new technology initiative, you must give equip them with confidence. This means:
... Sharing your vision with staff early in the planning process;
... Getting their input and feedback as plans develop so they have ownership in the solution;
... Setting clear milestones and benchmarks for progress;
... Communicating transparently and encouraging regular feedback;
... Unearthing what additional training staff will need to succeed;
... Addressing each and every fear staff members have early in the process;
... Starting the training process early so fear of change can be dispelled;
... Making sure rigorous testing is in place so the project is successful when it “goes live”;
... Recognizing employee achievement as worker efforts result in success; and
... Encouraging ideas for continual process improvement.
Poor communication, lack of project transparency, neglecting to inform and prepare workers for new initiatives, and failing to give people the time they need to learn and grow can shake people’s confidence. Project managers must work diligently to keep lines of communication open and to address concerns proactively.
Choosing a technology solution that is user friendly also goes a long way toward managing people’s expectations. Intuitive software and hardware that offer extensive and user-friendly guidance make adoption quicker, easier, and far less costly to support, resulting in a quicker turnaround from project implementation to producing measurable ROI.
Those responsible for choosing an AP solution must carefully consider the needs of their IT staff and end users―before, during, and after implementation, if they expect to achieve their goals. If people are properly prepared for what’s coming, and careful thought, planning, and follow-through are matched with a technology solution that is tailored to business needs, there is no reason any AP automation project should fail.
What do you think?
Getting the most out of an AP automation project has a lot to do with managing expectations. Jim Thumma (jthumma@docfinity.com), vice president of sales and marketing for Optical Image Technology, Inc. (OIT), explains:
The greatest barriers to successful AP automation are the same as the obstacles to implementing any new technology solution: the failure to manage people and their expectations.
Rarely does an automation project fail because of inadequate technology. The software that is used for automation today, as well as the hardware that supports it, is mature. Although technology continues to improve, many solutions in the marketplace today are fundamentally strong, reliable, secure, and consistent.
Problems typically surface―and projects sometimes fail―because of people’s mindsets and management’s lack of preparedness to help them to change. Many workers resist changing from something familiar to something new, even if the solution offers better tools than the ones they currently use. After all, as the saying goes, the devil you know is better than the one that’s unseen. At least the old way of doing things is familiar.
If you want to move your people from resistance toward acceptance (and ultimately enthusiastic support) of AP automation or any other new technology initiative, you must give equip them with confidence. This means:
... Sharing your vision with staff early in the planning process;
... Getting their input and feedback as plans develop so they have ownership in the solution;
... Setting clear milestones and benchmarks for progress;
... Communicating transparently and encouraging regular feedback;
... Unearthing what additional training staff will need to succeed;
... Addressing each and every fear staff members have early in the process;
... Starting the training process early so fear of change can be dispelled;
... Making sure rigorous testing is in place so the project is successful when it “goes live”;
... Recognizing employee achievement as worker efforts result in success; and
... Encouraging ideas for continual process improvement.
Poor communication, lack of project transparency, neglecting to inform and prepare workers for new initiatives, and failing to give people the time they need to learn and grow can shake people’s confidence. Project managers must work diligently to keep lines of communication open and to address concerns proactively.
Choosing a technology solution that is user friendly also goes a long way toward managing people’s expectations. Intuitive software and hardware that offer extensive and user-friendly guidance make adoption quicker, easier, and far less costly to support, resulting in a quicker turnaround from project implementation to producing measurable ROI.
Those responsible for choosing an AP solution must carefully consider the needs of their IT staff and end users―before, during, and after implementation, if they expect to achieve their goals. If people are properly prepared for what’s coming, and careful thought, planning, and follow-through are matched with a technology solution that is tailored to business needs, there is no reason any AP automation project should fail.
What do you think?
Monday, April 12, 2010
Getting Out of the AP Paper Rut
Posted by Mark Brousseau
Hosted information management solutions may hold the key for helping organizations finally get out of the AP paper rut. R. Edwin Pearce, executive vice president of sales and corporate development for eGistics (epearce@egisticsinc.com) explains:
As a result of the economic downturn, companies are reevaluating their internal operations for opportunities to generate cost savings and unlock hidden value. Nowhere is this value proposition clearer than in accounts payable (AP) processes.
Most enterprises are still employing manual methods of invoice-processing, which has inflated both processing costs and AP cycle times. Seventy-five percent of enterprises are currently mired in a manual and paper-based rut when it comes to managing the initial phase of the AP process, reports Aberdeen Group. Inefficient manual processing can cost $20 or more per invoice, Forrester finds. When you consider that invoice processing typically accounts for more than a third of purchase-to-pay processing costs (Hackett Group), and, similarly, a third of the time of AP personnel is spent in responding to inquiries concerning invoices, it's no wonder that enterprises are focused on cost containment and driving efficiencies in their AP departments.
By reducing their paper handling and manual processing, enterprises also are able to take more early payment discounts and optimize supplier payment strategies.
The Key to Savings
The key to streamlining AP lies in automating the invoice receipt and approval workflow, the initial phase of the AP process, says Aberdeen's Christopher Dwyer.
In a new IAPP study, enterprises cite discrepancy resolution, approval processing, and matching as the activities that cause their AP departments the most "pain."
Workflow technology can relieve all of these challenges. IAPP's study reports that 23 percent of AP departments that have implemented an automated approval workflow say they are "extremely satisfied" with the technology. An additional 37 percent of respondents describe themselves as "satisfied."
Using workflow technology to automate the invoice approval process can provide AP departments with compelling benefits, including: lower operations costs, streamlined processes, reduced AP cycle times, and better quality controls.
The challenge for AP departments is deploying a platform that can bridge their legacy systems, and providing anyone involved in the approval process with real-time access to images and data -- all while ensuring security and tracking.
This is where a hosted information management platform comes in. By combining repository management with workflow capabilities, a hosted information management platform provides:
• the ability to store any paper-based or electronic financial documents, including vendor bills, bank statements, credit card statements, and correspondence
• instant retrieval of any stored document
• compatibility with an enterprise's preferred front-end capture system and ERP system
• notifications when documents are ready for review and/or processing
With a hosted information management platform in place, AP staff no longer has to waste time searching for documents through crammed file cabinets or their e-mail inboxes for third-party inquiries or internal purposes. A hosted platform can accept and securely store feeds from other systems, such as those for electronic invoicing, or from any scanning solution an enterprise might use to capture documents, including distributed desktop scanners or centralized high-speed devices -- all in support of front or back-end AP systems
To process an invoice, AP staff can view a document in their hosted platform and enter the data into the corresponding record in their legacy AP system.
Additionally, unlike traditional licensed, on-premises solutions, a hosted platform doesn't require upfront capital expenditure for hardware and software or annual maintenance fees. And hosted solutions are designed to support approvers across departments or far-flung offices without additional licenses or customization.
IAPP's study found that 9 percent of AP departments plan to implement approval workflow technology in the next year. Hosted information management platforms can help by providing a more effective way of storing, sharing and accessing invoices and other documents -- and getting enterprises out of their paper rut.
What do you think?
Hosted information management solutions may hold the key for helping organizations finally get out of the AP paper rut. R. Edwin Pearce, executive vice president of sales and corporate development for eGistics (epearce@egisticsinc.com) explains:
As a result of the economic downturn, companies are reevaluating their internal operations for opportunities to generate cost savings and unlock hidden value. Nowhere is this value proposition clearer than in accounts payable (AP) processes.
Most enterprises are still employing manual methods of invoice-processing, which has inflated both processing costs and AP cycle times. Seventy-five percent of enterprises are currently mired in a manual and paper-based rut when it comes to managing the initial phase of the AP process, reports Aberdeen Group. Inefficient manual processing can cost $20 or more per invoice, Forrester finds. When you consider that invoice processing typically accounts for more than a third of purchase-to-pay processing costs (Hackett Group), and, similarly, a third of the time of AP personnel is spent in responding to inquiries concerning invoices, it's no wonder that enterprises are focused on cost containment and driving efficiencies in their AP departments.
By reducing their paper handling and manual processing, enterprises also are able to take more early payment discounts and optimize supplier payment strategies.
The Key to Savings
The key to streamlining AP lies in automating the invoice receipt and approval workflow, the initial phase of the AP process, says Aberdeen's Christopher Dwyer.
In a new IAPP study, enterprises cite discrepancy resolution, approval processing, and matching as the activities that cause their AP departments the most "pain."
Workflow technology can relieve all of these challenges. IAPP's study reports that 23 percent of AP departments that have implemented an automated approval workflow say they are "extremely satisfied" with the technology. An additional 37 percent of respondents describe themselves as "satisfied."
Using workflow technology to automate the invoice approval process can provide AP departments with compelling benefits, including: lower operations costs, streamlined processes, reduced AP cycle times, and better quality controls.
The challenge for AP departments is deploying a platform that can bridge their legacy systems, and providing anyone involved in the approval process with real-time access to images and data -- all while ensuring security and tracking.
This is where a hosted information management platform comes in. By combining repository management with workflow capabilities, a hosted information management platform provides:
• the ability to store any paper-based or electronic financial documents, including vendor bills, bank statements, credit card statements, and correspondence
• instant retrieval of any stored document
• compatibility with an enterprise's preferred front-end capture system and ERP system
• notifications when documents are ready for review and/or processing
With a hosted information management platform in place, AP staff no longer has to waste time searching for documents through crammed file cabinets or their e-mail inboxes for third-party inquiries or internal purposes. A hosted platform can accept and securely store feeds from other systems, such as those for electronic invoicing, or from any scanning solution an enterprise might use to capture documents, including distributed desktop scanners or centralized high-speed devices -- all in support of front or back-end AP systems
To process an invoice, AP staff can view a document in their hosted platform and enter the data into the corresponding record in their legacy AP system.
Additionally, unlike traditional licensed, on-premises solutions, a hosted platform doesn't require upfront capital expenditure for hardware and software or annual maintenance fees. And hosted solutions are designed to support approvers across departments or far-flung offices without additional licenses or customization.
IAPP's study found that 9 percent of AP departments plan to implement approval workflow technology in the next year. Hosted information management platforms can help by providing a more effective way of storing, sharing and accessing invoices and other documents -- and getting enterprises out of their paper rut.
What do you think?
Sunday, April 11, 2010
How AP Trends Impact AR
Posted by Mark Brousseau
AP trends highlighted in IAPP's recent AP Automation Study are driving the need for enterprise payments hubs. Mario Villarreal, president and COO of US Dataworks (mvillarreal@usdataworks.com) explains:
Organizations that are still on the fence about the need for an enterprise payments hub may feel like they've received a proverbial shove after reading the results of a new study on accounts payable (AP) trends conducted by International Accounts Payable Professionals (IAPP), based in Orlando, FL.
IAPP's study found that while the overwhelming number of organizations still make payments via paper check (97 percent), more organizations are using automated clearing house network/electronic funds transfer (79 percent), wire transfer (59 percent) and purchasing cards (50 percent). The move towards these electronic payment channels is driven by the unique attributes they offer, the IAPP study found. ACH/electronic funds eliminates most of the costs associated with paper checks. Wire payments are primarily used for sending payments internationally. Purchasing cards enable front-line employees to make purchases within minutes instead of days, while eliminating paperwork.
While electronic payments are building momentum, the IAPP study suggests that paper checks may have staying power: an eye-popping 91 percent of invoice dollars are still paid via paper check. Similarly, AP departments also are still overwhelmingly using the mail to submit remittances advices (82 percent); it is standard, IAPP's study finds, for the envelope with the paper check to also contain the remittance advice.
So why worry about what's happening in AP? Because those payments will eventually find their way into an organization's A/R department. And most corporate remittance operations are currently structured in silos to support individual payments types, such as check, ACH, wire, and purchasing card. Each of these payments types has its own fraud and compliance components, resulting in redundant systems, lack of transparency across channels, potential processing delays, and less than optimal customer service.
Based on the results of IAPP's study, these payments processing challenges may get worse.
Enter Enterprise Payments Hubs
That's where enterprise payments hubs come in.
An enterprise payments hub allows billers to realize working capital management improvements with a single platform for processing all paper-based and electronic payments and clearing channel, in turn, driving Straight Through Processing (STP) of receivables.
An enterprise payments hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes, resulting in an aggregated and centralized payments processing solution. An enterprise payments hub is capable of managing the entire payments lifecycle including payments processing, check processing, payments decisioning, and returns management -- all critical to receivables management.
Increased visibility can be realized through the use of consolidated payment monitoring and reporting, giving a more complete view of a company’s cash position. This helps companies gain centralized control of their cash and more accurate visibility into their payments and receivables.
The centralized reporting provided by an enterprise payments hub can provide internal business intelligence that can point to new revenue streams and increased cost efficiencies. Companies that can effectively view, analyze, and act on this payment information can react more quickly to receivables trends and customer service inquiries, while improving forecasting and budgeting.
An enterprise payments hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an enterprise payments hub can enhance workflow, data management and payment routing, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float. These capabilities also provide a platform for straight-through-processing (STP). Similarly, an enterprise payments hub reduces bank fees by facilitating least cost, best fit clearing.
The Bottom Line
With an enterprise payments hub, organizations can better realize the benefits of working capital management. Companies are now able to gain control and visibility over their payments processing and receivables management, which in turn offers treasurers new cash management tools. For instance, consolidating payments information in an enterprise payments hub produces a more accurate and timely view of payments. Payment streams also are consolidated for clearing. The end result is that least cost, best fit routing can be applied to payments to reduce fees and improve float.
With AP departments adopting a wider range of payment mechanisms, billers can't afford to sit on the fence any longer. To remain cost competitive -- and keep up with industry standards for accuracy and speed -- they'll need an enterprise payments hub.
What do you think?
AP trends highlighted in IAPP's recent AP Automation Study are driving the need for enterprise payments hubs. Mario Villarreal, president and COO of US Dataworks (mvillarreal@usdataworks.com) explains:
Organizations that are still on the fence about the need for an enterprise payments hub may feel like they've received a proverbial shove after reading the results of a new study on accounts payable (AP) trends conducted by International Accounts Payable Professionals (IAPP), based in Orlando, FL.
IAPP's study found that while the overwhelming number of organizations still make payments via paper check (97 percent), more organizations are using automated clearing house network/electronic funds transfer (79 percent), wire transfer (59 percent) and purchasing cards (50 percent). The move towards these electronic payment channels is driven by the unique attributes they offer, the IAPP study found. ACH/electronic funds eliminates most of the costs associated with paper checks. Wire payments are primarily used for sending payments internationally. Purchasing cards enable front-line employees to make purchases within minutes instead of days, while eliminating paperwork.
While electronic payments are building momentum, the IAPP study suggests that paper checks may have staying power: an eye-popping 91 percent of invoice dollars are still paid via paper check. Similarly, AP departments also are still overwhelmingly using the mail to submit remittances advices (82 percent); it is standard, IAPP's study finds, for the envelope with the paper check to also contain the remittance advice.
So why worry about what's happening in AP? Because those payments will eventually find their way into an organization's A/R department. And most corporate remittance operations are currently structured in silos to support individual payments types, such as check, ACH, wire, and purchasing card. Each of these payments types has its own fraud and compliance components, resulting in redundant systems, lack of transparency across channels, potential processing delays, and less than optimal customer service.
Based on the results of IAPP's study, these payments processing challenges may get worse.
Enter Enterprise Payments Hubs
That's where enterprise payments hubs come in.
An enterprise payments hub allows billers to realize working capital management improvements with a single platform for processing all paper-based and electronic payments and clearing channel, in turn, driving Straight Through Processing (STP) of receivables.
An enterprise payments hub provides a consolidated, end-to-end transaction processing platform that offers integration with legacy payments and receivables systems and processes, resulting in an aggregated and centralized payments processing solution. An enterprise payments hub is capable of managing the entire payments lifecycle including payments processing, check processing, payments decisioning, and returns management -- all critical to receivables management.
Increased visibility can be realized through the use of consolidated payment monitoring and reporting, giving a more complete view of a company’s cash position. This helps companies gain centralized control of their cash and more accurate visibility into their payments and receivables.
The centralized reporting provided by an enterprise payments hub can provide internal business intelligence that can point to new revenue streams and increased cost efficiencies. Companies that can effectively view, analyze, and act on this payment information can react more quickly to receivables trends and customer service inquiries, while improving forecasting and budgeting.
An enterprise payments hub is especially effective when the multiple payments channels of an organization are centralized, as standalone systems and processes can be significantly reduced. For example, an enterprise payments hub can enhance workflow, data management and payment routing, and facilitate common processes and administration across all payment channels. This functionality eliminates manual processes, accelerates exceptions handling, increases corporate agility, and improves float. These capabilities also provide a platform for straight-through-processing (STP). Similarly, an enterprise payments hub reduces bank fees by facilitating least cost, best fit clearing.
The Bottom Line
With an enterprise payments hub, organizations can better realize the benefits of working capital management. Companies are now able to gain control and visibility over their payments processing and receivables management, which in turn offers treasurers new cash management tools. For instance, consolidating payments information in an enterprise payments hub produces a more accurate and timely view of payments. Payment streams also are consolidated for clearing. The end result is that least cost, best fit routing can be applied to payments to reduce fees and improve float.
With AP departments adopting a wider range of payment mechanisms, billers can't afford to sit on the fence any longer. To remain cost competitive -- and keep up with industry standards for accuracy and speed -- they'll need an enterprise payments hub.
What do you think?
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