Tag Archives: payment automation


Why 71% of AP Departments are Automating in 2020 and You Should Too

If it feels like processing payments to suppliers is taking longer, you are not imagining things. One-third of accounts payable practitioners are working longer hours these days, according to the Institute of Finance and Management (IOFM).  In fact, eight percent of accounts payable practitioners are working an additional two hours or more per day, which … Read More

5 Ways FinTechs are Better Than Banks for Payment Automation

Why choose a FinTech over a bank? After years of false starts, businesses are migrating away from paper check payments to suppliers. Businesses now make less than half of their supplier payments via checks, per the Institute of Finance and Management’s (IOFM) 2018 Future of Accounts Payable Survey. What’s more, three years from now, businesses … Read More

Why 71% of AP Departments are Automating in 2020 and You Should Too

If it feels like processing payments to suppliers is taking longer, you are not imagining things.

One-third of accounts payable practitioners are working longer hours these days, according to the Institute of Finance and Management (IOFM).  In fact, eight percent of accounts payable practitioners are working an additional two hours or more per day, which is saying something when you consider the long days that most accounts payable practitioners logged before the move to remote work environments. 

These longer days can be attributed to trying to address the challenges created by today’s reality.  25% of accounts payable leaders say they are struggling to mitigate increased fraud and compliance risks.  22% of accounts payable leaders say their department has experienced a big spike in supplier inquiries regarding the status of invoices and payments.  And 20% of accounts payable leaders say that paying suppliers on-time, while staff work from home, is a major challenge. 

These sobering statistics illustrate the difficulty in adapting manual and semi-automated accounts payable processes to a remote work environment.  Only 9% of accounts payable leaders polled by IOFM say their department is fully automated with few or no manual processes.  33% of accounts payable departments have little automation.  And 14% of accounts payable departments process invoices and pay suppliers in a completely manual environment.

Manual processes create friction and inefficiency across the supplier payment lifecycle:

  • Key information is not captured
  • Data is poorly organized
  • Information is not timely
  • Systems are badly integrated
  • Labor costs are high

As a result, paying suppliers requires accounts payable practitioners to spend most of their working day bogged down on countless menial, manual tasks that distract them from higher-value activities. Manual tasks such as:

  • Supplier registration
  • Supplier data validation
  • Vendor record updates
  • Tax form collection
  • Sanctions screening
  • Invoice processing
  • Payment approval
  • Support for a range of payment methods
  • Remittance delivery
  • Currency conversion
  • Payment reconciliation
  • Tax reporting

This list goes on and on. 

On top of these manual tasks, accounts payable practitioners also must be mindful of dozens of business rules, policies, regulations, and auditor guidelines governing how suppliers get paid. 

The challenge of paying suppliers becomes even bigger as a business grows.

Growing businesses may have many different systems to integrate, complex processes to try to navigate and manage, and far flung accounts payable teams working across multiple sites.

All told, 84% of the typical accounts payable practitioner’s time is wasted on manual activities, IOFM benchmarking data finds.  In fact, most accounts payable managers spend more of their day on transaction processing than on the managerial tasks that they were hired for. 

No wonder that accounts payable has a reputation as a tactical back-office function. 

Businesses have had their fill of accounts payable inefficiencies.

71% of businesses plan to automate their accounts payable function further in 2020, according to IOFM.  Even businesses that are largely automated plan to deploy more technology.  Only 6% of accounts payable departments have thrown in the towel and say they have no plans to budge from their outdated, manual processes.

Automation eliminates friction across the accounts-payable lifecycle.  Invoices are aggregated onto a single platform.  Invoice data is effortlessly extracted, validated, and matched against purchase order information.  Invoices that require review or approval are digitally routed based upon pre-configured business rules.  Approved invoices are seamlessly uploaded into an ERP.  And a single file is used to pay suppliers in their preferred method.  And payments and invoices are reconciled in real-time.

In an automated accounts payable environment, staff only need to intervene when necessary.  The result is a function that delivers better business outcomes today, and greater scalability in the future.

This frictionless process is a far cry from the inefficiencies accounts payable is accustomed to.

Importantly, eliminating inefficiencies in the accounts payable lifecycle enables businesses to avoid costly late payment penalties, create more opportunities to capture early payment discounts, enhance visibility into cashflow and spending, strengthen supplier relationships, protect against fraud, and do more with far less.

Automating payments to suppliers is just what businesses of all sizes need in turbulent times.

Ready to eliminate inefficiencies in the way your business pays its suppliers?  If so, Paymerang wants to speak with you.  Contact us at sales@paymerang.com to arrange a no-obligation product demonstration. 

5 Ways FinTechs are Better Than Banks for Payment Automation

Why choose a FinTech over a bank?

After years of false starts, businesses are migrating away from paper check payments to suppliers.

Businesses now make less than half of their supplier payments via checks, per the Institute of Finance and Management’s (IOFM) 2018 Future of Accounts Payable Survey. What’s more, three years from now, businesses surveyed by IOFM expect to make more payments to suppliers via Automated Clearing House (ACH) payment than paper check (38 percent versus 18 percent), and businesses expect to double the percentage of payments to suppliers made via virtual card.

Why are businesses so optimistic that they will finally leave costly, inefficient and risky checks in the dust? Seventy percent of them have a strategy in place to move to electronic payments, IOFM finds.

A key element of an electronic payment strategy is how to enable and support suppliers and execute payments. It’s tempting to use a bank to provide those services. After all, banks are trusted partners to businesses, and have financial expertise. But, in most cases, financial technology (FinTech) solutions providers are a better option for businesses as a provider of electronic payments solutions.

Here are five ways that FinTech payment solutions beat bank payment offerings:

1. Multiple payment methods

Banks make the most money on supplier payments made via virtual card. It’s for that reason that many banks only support virtual card payments to suppliers. This forces buyers to partner with multiple banks and/or third parties to pay suppliers in their preferred method or to take a one-size-fits-all approach to electronic payments. In some cases, a buyer’s credit facility bars it from using a competing bank’s payment solution.

FinTech solutions support checks, e-checks, ACH and cards. This eliminates the complexity of partnering with multiple payment providers, the negative impact of a take-it-or-leave approach to supplier payments, and potential interference with their credit facility.

2. A single payment upload file

Some banks support different payment methods to suppliers, but it comes at a cost. Each payment type is supported by a different part of the bank, each with its own systems and processes. This means that buyers must generate a file for each method of payment, log into multiple bank portals to execute the payments and reconcile multiple payment files. If something goes wrong with a payment, information is not in a single location.

FinTech solutions eliminate this hassle by allowing buyers to upload a single payment file for all their supplier payments. FinTech solutions then parse the file based on payment method. Batches then are approved, and items are marked as paid. Easy!

3. Proven supplier enablement and management

Strong supplier adoption is critical to the success of an electronic payments program. But most banks take a half-hearted approach to enabling and supporting a buyer’s suppliers. Most banks only target a buyer’s largest suppliers or those suppliers that accept virtual cards. The onboarding campaigns used by many banks does a poor job of collecting and maintaining supplier information, only last a few months, and they don’t address ongoing changes (“churn”) in a buyer’s supplier base. Some banks require payment files to be formatted in a particular way. And banks typically put the burden of program administration and support on the shoulders of the buyer.

FinTech solutions providers offer proven ongoing services for enabling and supporting suppliers, ensuring optimum supplier adoption and electronic payments program retention.

4. Bank agnostic

Using a bank’s payment solution typically requires a buyer to commit to the bank for other services. Bank commitments can significantly add to the cost of using a bank’s payments service.

FinTech solutions are bank agnostic. They do not require buyers to change their banking relationships. Payments can be funded from any bank account. And buyers can choose how they facilitate supply chain financing and early payment programs.

5. Innovation

Banks are in the financial services business, not the automation industry. Few banks own the payment solutions that they market to businesses. Some banks outsource their payments business to other banks or to third parties. This means that most banks have limited control over how quickly the solutions they provide can adapt to meet changing business needs or emerging payments technologies and strategies. And bank solutions cannot easily be customized (if at all) to address a buyer’s needs. The multiple, antiquated solutions that some banks use across different payment methods complicates matters.

Conversely, innovation is a FinTech’s core mission. By partnering with a FinTech, businesses can be assured they are using the most advanced technology for paying suppliers. FinTech solutions also are easier to use and manage than those offered by most banks.

Partnering with a bank for supplier payments seems like a no-brainer. But the solutions provided by FinTechs beat bank offerings in five important ways: support for multiple payment methods, a single payment upload file, proven supplier enablement and support, no bank commitments, and innovation.

If your business is evaluating payment solutions providers, Paymerang wants to speak with you.

Contact Colleen Crist at sales@paymerang.com to arrange a no-obligation consultation with one of our payment experts.