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October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
6 Myths About Paying Suppliers Electronically – Debunked!
Jim Scott ACOMPAY
Mark Brousseau Brousseau & Associates
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Today’s Speakers
Mark BrousseauBrousseau & Associates
Jim ScottACOMPAY
Jim is SVP of ACOMPAY, a leading
FINTECH B2B payment solution
innovator. A 25-year financial
industry veteran, Jim is a frequent
contributor in payment industry
conferences and venues.
Mark Brousseau is a noted
analyst, speaker, writer and
marketer, with more than 26 years
of experience in advising leading
providers of financial operations
solutions and services.
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Why Supplier Electronically
3
Source: Institute of Finance and Management
48%
Reduced operational costs
24% Faster cycle times
6% Fewer errors and less fraud
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
B2B Payables Processing
Completing the “Last Mile”
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
B2B Payables Processing
Completing the “Last Mile”
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
SupplierAdoption
Management Support
25%
Resources
20%
8%
Source: The Institute of Finance and Management
No Strategy
7%
Electronic Payments Barriers
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Fake news Myth Urban legend
Misperception Hearsay
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
“PAYING SUPPLIERS WITH PAPER CHECKS ISN’T SO BAD.”
MYTH #1:
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How AP Staff Spend Their Time
Source: Institute of Finance & Management
Transaction processing 84%
Value-added activities, 16%
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How Traditional Approaches to Paying Suppliers Consumes Staff Time
• Setting up suppliers
• Collecting tax forms
• Keying invoice information
• Matching invoices with POs and shipping documents
• Tracking down purchasers
• Reviewing/signing checks
• Logging into multiple bank payment portals
• Responding to supplier phone calls and e-mails regarding payment status
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How Traditional Approaches to Paying Suppliers Consumes Staff Time
• Searching for lost or misplaced invoices
• Contacting suppliers with early pay discount offers
• Printing, signing and stuffing paper checks
• Reconciling payments
• Resolving payment issues
• Re-issuing lost checks
• Researching/resolving fraudulent transactions
• Manually generating reports
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Paper Checks Cost 30X as Much• Paper
• Check printers/ink
• Mail stuffing machines
• Postage
• Trips to the post office
• Staff time preparing check payments
• Replacing lost checks
• Responding to supplier payment inquiries
• Manually reconciling payments/invoices
• Adding temporary staff as volume increases
• Fraud losses
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
“WE ARE TOO SMALL TO PAY SUPPLIERS ELECTRONICALLY.”
MYTH #2:
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How Businesses Pay Suppliers
39%
30%
6%11% 9%
5%
Paper check ACH Virtual card P-card Wire transfer Other
What % of payments do you make via the following methods?
Source: Institute of Finance & Management
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
The Tide is Turning Against Paper Checks
18%
38%
16%12%
9% 7%
Paper check ACH Virtual card P-card Wire transfer Other
How do you expect you will pay suppliers 3 years from now?
Source: Institute of Finance & Management
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
The Tide is Turning Against Paper Checks
Source: Institute of Finance & Management
18%
38%
16%
12%
9%7%
Paper check ACH Virtual card P-card Wire transfer Other
How do you expect you will pay suppliers 3 years from now?
70% of businesses have a strategy in place to increase their percentage of electronic payments to suppliers.
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
“OUR SUPPLIERS WILL NEVER ACCEPT ELECTRONIC PAYMENTS.”
MYTH #3:
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Benefits to Suppliers
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Why Suppliers Accept Virtual Cards• Fast
• Reliable
• Transparent
• Easy
• Secure
• Green
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Analyze your Suppliers• Current relationship
• Current payment type
• Current payment terms
• Requests for early payment
• Payments types accepted
• Number of transactions
• Average transaction amount
Step 1
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Develop a Plan• Comprehensive outreach
& communications
• Project objectives & goals
• Rules of engagement
• Critical action items
• Milestones
• Clear timeline
Step 2
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Enroll Suppliers• Leverage payments partners to
contact & enroll suppliers
• Tracking down contact• Paperwork• Supplier registration• Administrative tasks• Strategies for increasing
supplier adoption
Step 3
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Offer Payment Options Step 4
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Don’t Overlook Support• Onboarding
• Contact updates
• Bank changes
• Payment status
• Payment entry
• Technical issues
• New payment types
Step 5
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Never Stop Enrolling
• Plan to regularly review your vendor master file
• New suppliers• New supplier contacts• Revised payment terms
Step 6
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
“SENIOR MANAGEMENT WILL NEVER AGREE TO THIS.”
MYTH #4:
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Businesses Expect More From AP
9.52%
42.86%
25.17%
21.77%
0.68%
Significantly higher strategic importance
Slightly higher strategic importance
Unchanged (we are of high strategicimportance)
Unchanged (we are of low strategicimportance)
Slightly lower strategic importance
How will your AP department’s strategic importance change?
Source: Institute of Finance & Management
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Early PaymentDiscounts
Extending DPO
57%
Card Rebates
52%34%
Source: The Institute of Finance and Management
Transforming AP into a Profit Center
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
How to Win Over Management
Show how improvements will
increase efficiencies, how and the overall
effectiveness
Include the cost savings, new
discounts captured and rebate
opportunities
Detail the comparative return
on investment+
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
“WE HAVE TO USE A BANK TO PAY SUPPLIERS ELECTRONICALLY.”
MYTH #5:
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
The Problem with BanksThe approach to payments automation taken by most banks creates four problems:
1. Missed opportunities
2. No payment options
3. Low supplier adoption
4. Poor support
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
The Benefits of a Payments Hub
Payments Hub
Approach Targets 100% of suppliers
Outreach Data appended to supplier contact info
Onboarding Customized outreach is guided by vendor analysis
Payments Suppliers are paid in the payment method that they prefer with options for early payment discounts
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
“PAYING SUPPLIERS ELECTRONICALLY IS COMPLICATED.”
MYTH #6:
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Electronic PaymentConversion
Payment
Check Printing& Delivery
Credit Card Processing
ACH Bank Payments
File
Credit
AP Automation
October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ
Thank You!Jim ScottGlobal Commercial Services, ACOMPAYAmerican [email protected]
Mark BrousseauBrousseau & [email protected]@markbrousseau