Attributes of a High-Performance Supplier Payments Function

Posted by Greg Bartels on Oct 12, 2021 4:04:27 PM
Greg Bartels

Businesses are demanding more from finance professionals.

CFOs, treasurers and AP leaders are expected to help guide the business through these tough times.

It’s no surprise that finance professionals are looking to automation to help.

High-Performance Supplier Payments

Automating and optimizing processes such as invoice processing and supplier payments can provide the smart insights, efficiencies, and financial controls that a business needs in times like these.

But those benefits will remain out of reach to finance professionals who choose the wrong solution or choose not to optimize what they currently have in place.

What to look for in a supplier payment solution

To ensure that the supplier payments solution you choose will help your department achieve optimum results, here are four attributes of a high-performance supplier payment solution:

1. Maximum card rebates. Card rebates are a game-changer for AP. They can offset an AP department’s overhead and return money to the business. But the half-hearted approach that most banks and electronic payment solutions providers use to drive card participation produces middling results. And your AP staff has better things to do than call and e-mail suppliers about receiving card payments. High performance supplier payment solutions ensure that you don’t leave money on the table. These solutions use proprietary technology and best practices to uncover opportunities to convert suppliers to cards. Payments are dynamically routed and optimized for optimum card participation. The technology also makes it easy for suppliers to receive card payments. It meets suppliers where they are. Suppliers aren’t burdened with new forms to sign or processes to implement. And these solutions continuously look for opportunities to increase card participation. These are the reasons that high performance supplier payment solutions achieve card participation rates of 60 percent, translating into rebate revenues several times higher than legacy card programs.

2. Supplier friendly. Strong supplier relationships are vital to the growth of a business. But many electronic payment solutions providers can make things hard on your suppliers. Suppliers may have to fill out lots of paperwork to receive card payments, even if they now accept them. They may be forced to change their internal processes. Suppliers may not get paid on time. They may not get all the remittance details they need to post your payments to their accounts receivable system. High performance supplier payment solutions are supplier friendly. The technology can automatically determine each supplier’s payment terms and preferred method of payment. Suppliers don’t have to fill out paperwork, take time out of their busy days to speak with someone on the phone, or change their existing processes to receive card payments. And there is less chance that a supplier’s payment will be wrong.

3. Streamlined processes. Every AP professional knows that paying suppliers with a paper check is a headache. What’s not as obvious is how cumbersome and unnecessarily complex it can be to pay suppliers with some electronic payment solutions. Many of these systems require you to manually track payment preferences and payment due dates. Some require you to log into multiple portals to make different types of payments. Others require you to manually generate and send remittance advices. Some force you to pull together reports for each payment type for reconciliation. High performance supplier payment solutions digitize and simplify the process of paying suppliers. The technology can be deployed fast with no disruption to your existing systems or processes. Robotic process automation (RPA) and machine learning (ML) ensure that suppliers are paid on time and accurately. All payments are managed from a single platform. Rich remittance details are generated and transmitted to suppliers automatically. And transactions are automatically reconciled in real time.

4. No hidden costs. Escaping the high costs of paper checks is one of the most compelling benefits of paying suppliers electronically. But many electronic payment solutions come with out-of-pocket expenses of their own – often buried in the fine print. High performance supplier payment solutions don’t require AP departments to pay any operating expenses or capital expenses or install any software. This is made possible by the industry-leading card participation and rebates that high performance supplier payment solutions achieve.

Each of these attributes is compelling.

Together, they generate high performance in accounts payable.

What are the benefits of paying suppliers electronically?

Paying suppliers electronically can empower an AP department to improve effectiveness, generate new profits from supplier payments, and increase payment security. But AP departments cannot achieve optimum results from electronic payments without a high-performance supplier payment solution.

By choosing a solution that maximizes card rebates, is supplier friendly, streamlines processes, and doesn’t include any hidden costs, AP departments will be on their way to becoming fully powered.

Is your approach to paying suppliers delivering underwhelming results?

If so, IPS wants to speak with you. Contact us to chat with one of our payment experts.

 

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Tags: AP Workflow, Invoice Processing, AP Automation, Accounts Payable Workflow, AP Automation Solutions, Accounts Payable Automation, AP Supplier Payments