Key Considerations for Bank ePayables Programs

Efficient management of your Accounts Payable (AP) process is essential for your business’s financial health. One approach to improving AP efficiency is through Banking ePayables Programs. In this blog, we will delve into key considerations when choosing banking ePayables programs, with a focus on the critical aspect payment fraud and it’s potential impact on your organization’s security.

Key Considerations for Banking ePayables Programs

1. Positive Pay Thresholds

• Collaboration with Your Bank: When implementing a banking ePayables program, it’s crucial to have open communication with your bank regarding Positive Pay thresholds. Work together to find the right balance between fraud prevention and operational efficiency.
• Low Positive Pay Thresholds and Fraud Risks: A low threshold means even minor discrepancies in checks can trigger alerts, leading to a high volume of false positives. This can result in operational inefficiencies and potentially overlook genuine fraud attempts. Organizations should always start with the dial turned up and scale back from there.
• Customization: Some banks offer the flexibility to customize Positive Pay thresholds based on your organization’s specific needs and risk tolerance. Explore this option to ensure it aligns with your requirements.

2. Security Measures

• Persistent Fraud Protection: Ensure that your banking ePayables program includes robust and continuous fraud protection measures. This is critical in safeguarding your organization’s finances in today’s digital and cyber-threat-prone landscape.
• Data Security: Verify that the program provides adequate data security to protect sensitive payment information. Verify with the bank who is collecting, storing, and maintaining ACH information and where is that information being stored? Additionally, confirm who is responsible for NACHA compliance. Data breaches can have severe financial and reputational consequences.

3. Efficiency Enhancement

• Streamlined Workflows: Evaluate the program’s ability to streamline your AP workflows. Can you upload single unsorted payment files to reduce manual work? Does it provide end-to-end reconciliation to enhance efficiency?
• Vendor Management: Consider whether the program offers continuous vendor research and enrollment throughout the vendor lifecycle. This feature can help maintain accurate payment details and reduce the risk of payment errors.

4. Payment Variety

• Flexibility in Payment Methods: Ensure that the banking ePayables program offers flexibility in payment methods, such as cards, ACH (Automated Clearing House), and checks. Verify with the banking institution if they deliver the payments in the preferred method of the vendor, if they allow multiple delivery methods by type, and if the bank or customer is responsible for the delivery.

5. Compliance

• Adherence to Regulations: Confirm that the program complies with industry standards and regulations, including PCI (Payment Card Industry Data Security Standard), NACHA (National Automated Clearing House Association), OFAC (Office of Foreign Assets Control), and any other relevant compliance requirements.

6. Cost Considerations

• Evaluate Fees: Be aware of any fees associated with the banking ePayables program, including setup fees, transaction fees, or maintenance fees. These costs should be factored into your decision-making process. When evaluating card programs for basis points or BPS.
• Cash Back Rewards on Virtual Card Payments: Look into how the program handles cash back rewards (BPS – Basis Points) on virtual card payments. Banks may offer cash back rewards, often calculated in Basis Points (BPS). Ensure that the rewards structure is transparent and easy for the client to understand, as some banks may split BPS differently based on small or large ticket transactions. Clarity in reward calculations is vital for accurate financial planning.

7. Customer Support

• Accessible Support: Assess the availability and responsiveness of customer support provided by the bank offering the ePayables program. Responsive support can be invaluable in addressing issues and inquiries promptly.

Banking ePayables programs offer a valuable avenue for optimizing your AP processes and enhancing financial efficiency. However, the effectiveness of these programs hinges on several key considerations, with Positive Pay thresholds being a critical one.

When implementing a banking ePayables program, prioritize open communication with your bank regarding Positive Pay thresholds. Collaborate to strike the right balance between fraud prevention and operational efficiency. Additionally, ensure that the program offers robust security measures, streamlined workflows, flexibility in payment methods, compliance adherence, and transparent fee structures.

In the pursuit of optimizing your Accounts Payable process, it’s crucial to continuously evaluate whether your banking ePayables program is meeting your expectations. If you find that it’s creating more work than it’s saving, falling short of your quality standards, or exposing your organization to undue fraud risks due to factors like low Positive Pay thresholds, it may be time to explore the benefits of an AP Automation platform. Such platforms offer comprehensive solutions with advanced features to streamline your AP operations, enhance security, and reduce your workload. Ultimately, the key lies in choosing the solution that aligns best with your organization’s specific needs and goals, ensuring that your AP process becomes a strategic asset rather than a liability.