Expand Electronic Expand Electronic Payment to Payment to

Increase RevenuesIncrease RevenuesCheryl Shanaberger, MPA, CPPOCheryl Shanaberger, MPA, CPPO

Deputy DirectorDeputy DirectorOffice of Management and BudgetOffice of Management and Budget

City of Port St LucieCity of Port St LucieMarch 22, 2013March 22, 2013

Our Purpose Today:Our Purpose Today:

Discuss payment options that generate Discuss payment options that generate revenuerevenue

Discuss strategies to implement to Discuss strategies to implement to encourage the vendor encourage the vendor community to accept alternate community to accept alternate payment methodspayment methods

Electronic PaymentsElectronic Payments

E-payables (Electronic Payables)• Payables automation• Push payments• Pull to pay• STP (Straight-through payments)• BIP (Buyer-initiated payment)• EAP (Electronic Accounts Payable)• SUA (Single-Use accounts)• EIPP (Electronic Invoice Presentment

& payment)

Electronic PaymentsElectronic Payments

Procurement Cards• Travel Cards• Fuel Cards

Electronic PayablesElectronic Payables

Payment systems:Payment systems:

•Initiated & managed centrally withinInitiated & managed centrally within •Utilize some part of traditional P2P Utilize some part of traditional P2P

processprocess•Suppliers still utilize the card Suppliers still utilize the card networknetwork

•E-Payables are about the payment E-Payables are about the payment processprocess

Electronic PayablesElectronic Payables(E-Payables)(E-Payables)

• Agency approves invoiceAgency approves invoice• Agency Notifies provider for paymentAgency Notifies provider for payment• Notification is usually an uploaded Notification is usually an uploaded

filefile• Most cases suppliers receive Most cases suppliers receive

remittance information from the end-remittance information from the end-user’s provideruser’s provider

E – PayablesE – Payables

Supplier gets paid:Supplier gets paid:

• Pull model- by charging a designated Pull model- by charging a designated card account # (can be the same or card account # (can be the same or different each time); Supplier must different each time); Supplier must process a charge and retain card #process a charge and retain card #

• Push model- (STP) a deposit into it’s Push model- (STP) a deposit into it’s merchant account; similar to an ACH merchant account; similar to an ACH payment; Supplier does not process payment; Supplier does not process chargecharge

BenefitsBenefits

• Occur faster than check paymentsOccur faster than check payments

• Provides more budget control if Provides more budget control if incorporated with an encumbrance incorporated with an encumbrance processprocess

• Streamlines the payment processStreamlines the payment process

ChallengesChallenges

• Slower than traditional P-Card ModelSlower than traditional P-Card Model

• Less process savings than P-CardLess process savings than P-Card

• Less Cash flow savingsLess Cash flow savings

• Less beneficial to supplierLess beneficial to supplier

Benefits to end-user E-Benefits to end-user E-Payables & P-CardPayables & P-Card

• Increase days payable outstandingIncrease days payable outstanding• Advantage of Early paymentAdvantage of Early payment• Eliminates need to retain suppliers’ Eliminates need to retain suppliers’

banking informationbanking information• Reduction in check payments and costReduction in check payments and cost• Reduced exposure to fraudReduced exposure to fraud• No federal 1099 reportingNo federal 1099 reporting• Timely reporting & tools for Timely reporting & tools for

reconciliationreconciliation• Increased spend/payment visibilityIncreased spend/payment visibility

Agency ChallengesAgency Challenges

• Incorporate electronic payable into a Incorporate electronic payable into a payments strategypayments strategy

• Supplier enrollmentSupplier enrollment• Internal resourcesInternal resources• It SupportIt Support• System integration issuesSystem integration issues• Proper data transmission for all Proper data transmission for all

partiesparties

Supplier BarriersSupplier Barriers

• Cost, Cost, CostCost, Cost, Cost• Concerns sharing bank account Concerns sharing bank account

detailsdetails• Fear of changeFear of change• Concern of retaining card #Concern of retaining card #

Overcoming Supplier BarriersOvercoming Supplier Barriers

• Offer multiple options for invoicing & Offer multiple options for invoicing & paymentpayment

• Simplify & promote enrollmentSimplify & promote enrollment• Know your suppliers Know your suppliers • What offers and incentives can your What offers and incentives can your

agency offeragency offer• Include in all RFP’s & BidsInclude in all RFP’s & Bids

Think E – PaymentThink E – Payment Profit MarginProfit MarginRetainageRetainageMobilizationMobilizationPayment TermsPayment TermsRebate sharingRebate sharingBonds Bonds Fees are deductible by vendorFees are deductible by vendorPoints for Award in RFPPoints for Award in RFP• Rebate considered in awardRebate considered in award

Questions?Questions?

Ref: Bank of America Merrill Lynch, Ref: Bank of America Merrill Lynch, Driving automation in the payable Driving automation in the payable process June 2012process June 2012

Ref: NAPCP.org, Electronic PayablesRef: NAPCP.org, Electronic Payables