7 steps to strong supplier adoption in electronic payments … · • the latest benchmarks:...

November 12-14, 2018 | Las Vegas

7 Steps to Strong Supplier Adoption in Electronic Payments

Jim Scott ACOM Solutions

Mark Brousseau Brousseau & Associates

Learning Objectives


• Why electronic payments?

• The latest benchmarks: opportunities & challenges

• 7 steps to strong supplier adoption of electronic payments

• Solutions to your biggest adoption challenges

How AP Staff Spend their Time


Transaction processing, 84%

Value-added activities, 16%

Source: IOFM AP Department Benchmarks

How Supplier Payments Consume AP Staff Time


• Setting up suppliers• Gathering payment details• Collecting tax forms• Keying invoice information• Matching invoices with POs

and shipping documents

• Tracking down purchasers• Searching for lost or

misplaced invoices• Setting up payments• Reconciling payments• Resolving payment issues

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?

Source: IOFM Future of AP Survey

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.


Why organizations still use paper checks


• Familiarity• No technology required• Easy delivery of remittance data• Perceived control• “Everyone accepts checks”• Float while check is in mail

Benefits of electronic payments


Paper Checks Cost 30X as Much


• Collecting, storing and maintaining supplier bank account data

• Printing, signing and mailing paper checks

• Logging into multiple bank portals

• Managing multiple payments systems

• High bank fees• Replacing lost checks• Responding to supplier

payment inquiries• Manually reconciling

payments/invoices• Adding temporary staff as

volume increases• Fraud losses

Why Pay Suppliers Electronically



Complete the “Last Mile”


Accounts Payable is Becoming More Strategic


9.52%

42.86%

25.17%

21.77%

0.68%

Significantly higher strategic importance

Slightly higher strategic importance

Unchanged (we are of high strategic importance)

Unchanged (we are of low strategic importance)

Slightly lower strategic importance

How will your AP department’s strategic importance change?


Transforming AP Into a Profit Center



Why Senior Management Cares


13%37%

28%18%

30%30%

13%11%

26%37%

33%29%

9%15%

NoneDays Payables Outstanding

Percentage of invoices paid to termsValue of early-payment discounts offered

Percentage of early-payment discounts capturedPercentage of supplier payments made electronically

Percentage of duplicate supplier paymentsNumber of suppliers in our vendor master database

Number or percent of touchless transactionsCost savings and cost avoidance

Cost per invoice processedValue of annual card rebates/rewards

Annual fraud lossesAccruals

Which metrics will be more important to senior management?

The Strategic Importance of Electronic Payments


Biggest Barriers to Electronic Payments Growth



7 STEPS TO STRONG SUPPLIER ADOPTIONElectronic Payments

Step #1: Take a hard look at your suppliers


• Current relationship• Current payment type• Current payment terms• Requests for early payment• Payments types accepted• Number of transactions• Average transaction amount

Step #2: Don’t leave things to chance


• Comprehensive outreach & communications strategy• Project objectives & goals• Rules of engagement• Critical action items• Milestones• Clear timeline

Step #3: Strive for driving value with 100% of your suppliers


• Leverage payments partners to contact & enroll suppliers• Tracking down contact• Paperwork• Supplier registration• Administrative tasks• Strategies for increasing

supplier adoption

Step #4: Educate Suppliers on the Benefits


Faster Payments

Rich Remittance

Data

Streamlined Reconciliation

Secure Payments

Why Suppliers Accept Virtual Cards


• Electronic• Fast• Transparent• Easy• Secure• Green

Step #5: Pay suppliers the way they want to be paid


Card ACH WireCheck Global

Use a single file for all payment types


Step #6: Don’t be left holding the bag on support


• Onboarding• Contact updates• Bank changes• Payment status• Payment entry• Technical issues• New payment types

Step #7: Never stop onboarding suppliers


• Plan to regularly review your vendor master file• New suppliers• New supplier contacts• Revised payment terms

Case Study: Menorah Manor


• Community-sponsored not-for-profit senior healthcare organization• Located in St. Petersburg, FL• $10 million annual spend• 300 checks monthly• 350 total suppliers• All supplier payments made via check

Business issues


• Wasted time and labor• Frequent payment delays• Lots of supplier inquiries regarding status• Strained relationships with key suppliers• Weak negotiating position with suppliers• Missed early payment discounts

Benefits of electronic payments to Menorah Manor


• 70% supplier adoption• Single file for all payment types• Freed up to 50 hours of staff time each month• Annual cost savings of $12,000• No payment delays• Fewer supplier inquiries• Early payment discounts

• Cash-back rebates

How to sell CFOs on electronic payments


What are your biggest adoption challenges?


Contact Information


Jim ScottACOM [email protected]

Mark BrousseauBrousseau & [email protected]

7 steps to strong supplier adoption in electronic payments … · • the latest benchmarks:...

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