Digitizing supplier payments has long been on the roadmap at many corporations, but way down near the bottom, according to panelists at a recent IOFM Virtual Town Hall Meeting: The B2B Payments Answer Forum. Either people didn’t have the budget, thought it would be a heavy lift for AP and/or IT, or just felt like checks were working. They may not have been optimal, but the processes for producing checks were well established and had been sustained over decades.
That all changed in 2020. COVID-19-related health and safety requirements and the mass-scale remote work changes demonstrated that check-writing processes are no longer sustainable and accelerated the move toward electronic payments.
In a poll of 163 AP and finance professionals conducted during the forum, 35 percent of respondents said their electronic payments volume had increased by more than 10 percent in the past year. Only 16 percent of attendees said there had been no change.
The Forum, hosted by Mark Brousseau, a consultant and thought leader on accounts payable, accounts receivable, payments, and document automation, was designed to answer the most pressing questions as companies seek to further automate their processes and eliminate paper checks.
Forum participants included Brian Greehan from Bottomline; Anand Misra at Tipalti; Daniel Ball from Medius; and myself, Mark Penserini, representing Nvoicepay.
Here’s what was on the mind of forum participants and attendees that companies looking to automate payments should know:
“A lot of the technologies we’re going to talk about today weren’t a strong option seven, eight, nine years ago,” said Brousseau. “The tech has met the business demand now.”
That should give AP professionals a lot more time to focus on strategic initiatives, and no time focusing on what payment method to choose and how to transmit it to the bank.
“If you want to be entirely relevant to an organization, you have to accommodate some choice,” said Greehan. “There are a lot of payment vehicles to get you where you want to go.” The key, he said, is figuring out what kinds of options are relevant for your supplier base.
“We’ve seen over the last few years systems evolving to allow for you to send those artifacts electronically attached to the payment,” said Ball. “That’s giving suppliers much better visibility because it can get quite complex when you need to provide supporting evidence as to what the payment relates to.”
They also take on the whole enablement process for their customers, including collecting, storing, securing, and maintaining supplier banking data. That includes protection against fraudulent attempts to change bank account data and divert payments to criminals.
This has long been an obstacle to electronic payment adoption. People in AP “don't want to be managing master data and becoming the custodians of it,” said Ball. “All of that is a massive overhead. And it's a distraction from what they should be doing.”
“There are benefits to be gained from not just automating payments, but the entire operation, which includes the invoice automation, processing automation, which includes your approvals, and your integration with ERP systems,” said Misra.