6 myths about paying suppliers electronically –debunked!...october 15-17, 2019 | westin kierland...

October 15-17, 2019 | Westin Kierland Resort | Scottsdale/Phoenix, AZ

6 Myths About Paying Suppliers Electronically – Debunked!

Jim Scott ACOMPAY

Mark Brousseau Brousseau & Associates


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.


Why Supplier Electronically

3

Source: Institute of Finance and Management

48%

Reduced operational costs

24% Faster cycle times

6% Fewer errors and less fraud


B2B Payables Processing

Completing the “Last Mile”


SupplierAdoption

Management Support

25%

Resources

20%

8%

Source: The Institute of Finance and Management

No Strategy

7%

Electronic Payments Barriers


Fake news Myth Urban legend

Misperception Hearsay


“PAYING SUPPLIERS WITH PAPER CHECKS ISN’T SO BAD.”

MYTH #1:


How AP Staff Spend Their Time

Source: Institute of Finance & Management

Transaction processing 84%

Value-added activities, 16%


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


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


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


“WE ARE TOO SMALL TO PAY SUPPLIERS ELECTRONICALLY.”

MYTH #2:


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?



The Tide is Turning Against Paper Checks

18%

38%

16%12%

9% 7%


How do you expect you will pay suppliers 3 years from now?



The Tide is Turning Against Paper Checks


18%

38%

16%

12%

9%7%


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.


“OUR SUPPLIERS WILL NEVER ACCEPT ELECTRONIC PAYMENTS.”

MYTH #3:


Benefits to Suppliers


Why Suppliers Accept Virtual Cards• Fast

• Reliable

• Transparent

• Easy

• Secure

• Green


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


Develop a Plan• Comprehensive outreach

& communications

• Project objectives & goals

• Rules of engagement

• Critical action items

• Milestones

• Clear timeline

Step 2


Enroll Suppliers• Leverage payments partners to

contact & enroll suppliers

• Tracking down contact• Paperwork• Supplier registration• Administrative tasks• Strategies for increasing

supplier adoption

Step 3


Offer Payment Options Step 4


Don’t Overlook Support• Onboarding

• Contact updates

• Bank changes

• Payment status

• Payment entry

• Technical issues

• New payment types

Step 5


Never Stop Enrolling

• Plan to regularly review your vendor master file

• New suppliers• New supplier contacts• Revised payment terms

Step 6


“SENIOR MANAGEMENT WILL NEVER AGREE TO THIS.”

MYTH #4:


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?



Early PaymentDiscounts

Extending DPO

57%

Card Rebates

52%34%

Source: The Institute of Finance and Management

Transforming AP into a Profit Center


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+


“WE HAVE TO USE A BANK TO PAY SUPPLIERS ELECTRONICALLY.”

MYTH #5:


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


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


“PAYING SUPPLIERS ELECTRONICALLY IS COMPLICATED.”

MYTH #6:


Electronic PaymentConversion

Payment

Check Printing& Delivery

Credit Card Processing

ACH Bank Payments

File

Credit

AP Automation


Thank You!Jim ScottGlobal Commercial Services, ACOMPAYAmerican [email protected]

Mark BrousseauBrousseau & [email protected]@markbrousseau

6 myths about paying suppliers electronically –debunked!...october 15-17, 2019 | westin kierland...

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