A new year means a time for change, innovation, growth and betterment. We all set personal and professional New Year's resolutions — some resolutions we keep, some we break...some we never start.
Breaking and never starting resolutions are the thing of the past. 2017 is your year to reach and stick to your resolutions. While we can't help you with your personal goals, we can assist with your accounts payable professional 2017 goals.
We've compiled a list of attainable Accounts Payable New Year's resolutions for 2017 to get you started...
1. Streamline & Save Time
It is important to be able to spend more time focused on what is important — strategic elements of managing the business finances, calculating profits, and reducing expenses.
- Let's face it... manually printing and mailing checks is time consuming . The most efficient way to pay is to electronify. Doing so saves time and money. Seek a system that integrates with your accounting or ERP system and does not require the rekeying of data. One that is integrated into the workflow is even better but regardless of workflows, DO NOT use a system that requires re-keying.
- If you are't quite ready for electronifying your payments, you may want to consider moving your check-printing to an off-site check-printing facility that will do all the tedious work for you — from printing, to stuffing envelopes to putting your checks in the mail on time.
2. Cut Cost
Payments and the way they are made can have a big impact on the business environment. Starting with a reduction in the labor hours it takes to issue payments, to the reduction in the supplies and materials, to an increased certainty of cash flow; payments that are processed electronically offer a substantial impact to your bottom line. Eliminating manual processes of outdated payment processing methods, which put a strain on the efficiency of an organization, creates a significant improvement to the bottom line.
In addition, a paper check, on average, costs four dollars to generate (postage, check stock, envelopes, printing, and storage costs). This number is then multiplied if the company uses different check stock and supplies,which result in compounding the costs by the number of bank accounts a company uses. In comparison, an ACH payment payment transaction costs roughly fifty cents per transaction with no need to have payments physically monitored for hours during issuance.
Instead companies create a separation of duties and authority of each user within the payment module which accomplishes the internal controls on security required when issuing payments. Some companies send and receive payments in many different formats — credit cards, electronic payments and paper checks. With Credit payments there is usually no cost per transaction. With a comprehensive payment system and more time-efficient electronic payment tools (credit, debit and automatic and/or recurring payments), more seamless payment options will be created, significantly reducing expenses.
By moving your business from paper check printing to electronic payments, you will experience many benefits including freed employee time, much lower costs per transaction, and there's even an opportunity for monthly cash rebates — creating a new revenue stream for your company.
3. Make My Department a Revenue Generator
Virtual cards have been available for use for several years and what they offer companies in benefits far outweigh the perks of issuing paper checks. Single-issue V-Card numbers are unique in each transaction and tied to a specific vendor for a specific dollar amount. Every dollar a company spends on Virtual Card vendor payments earns them monthly cash rebates that can create a new revenue stream of approximately 1% of a company's A/P that was spent on virtual cards. That impacts the bottom line, especially when a virtual card partner pays the rebates each month and doesn't hold off for quarterly or annual disbursement. With less paper being used, automatic savings, and a monthly cash rebate program, a virtual card rebates system is a win-win situation.
Typically, a company can conservatively estimate that 25 - 30% of their A/P spend can migrate to virtual cards if they have never issued another form of electronic payment. Optimizing the vendor onboarding program, using a strategic vendor enrollment program, will ensure that a company's results meets or exceeds this conservative estimate.
4. Keep Better Records with a Flexible Database & AP History
Do you ever find yourself having to go pull a file from months ago? We all know how frustrating this can be.
With AP automation, you can automatically build a systematic organization of payment records. Not only are you, able to easily run a query to track progress and pull a requested report, but you can have these payment reports be visible to your supplier via a vendor web portal.
Furthermore, you can add updates and monitor fraudulent activity. This type of system allows you to examine historical data quickly and strategize innovative ways to save money by taking advantage of payment incentives.
In addition to a searchable database of AP history at you fingertips, you no longer have to access the information from a traditional office. If you are out of town, then you can access documents from anywhere via the cloud-based system.
5. Reduce Calls & Improve Vendor Relationships
It may come as a surprise that the efficiency of your accounts payable processes can play a part in strengthening vendor relationships. As mentioned above, better record keeping will reduce the number of calls from vendors looking for payment reports. Also, better payment terms and higher quality payables services can help. Streamlining the processing of electronic invoices for approval and then payments, will reduce the number of phone calls into Accounts Payable regarding payment status.
- Create Transparency:
Utilizing technology you may set up systems that allow the suppliers to see their invoice's location within your accounts payable approval process or simply notify them when the invoice is approved to be paid. Either approach gives them more information and requires them to ask fewer questions. This enhances the relationship.
- Consistent Communication
By utilizing electronic payments, your vendor will always know when a payment has been processed. Whether you are settling the payment today with a Virtual Card or 5 days from now via ACH, the supplier can always count on your team to notify them in advance. This too, enhances the relationship.
- Overall Accuracy:
Many systems (like ours) allow the vendor to see ALL of the details related to an electronic payment. Details like the invoice numbers, descriptions, amounts, and discounts...presented in such a way that there is NO question about how to apply the cash on their end. This also enhances the relationship.
These benefits create a business relationship that promotes efficient processing, time savings and cost savings for your supplier that as mentioned before makes you a preferred customer.
6. Reduce Fraud Risk
Payment Security and fraud reduction starts with Accounts Payable Departments following standardized processes that require separation of duties for issuing payments. At the minimum, we recommend that the person who keys in a payment (paper or ePayment) not issue the payment. Another employee should issue. Next, we expect that any system or tool used to issue ACH payments maintain all vendor bank account data in an encrypted file, not accessible nor editable by anyone internally without the highest level of security clearance. Note: although high-end ERP systems issue electronic payments, many do not specialize in payment processing and their applications do not contain this added protection against an internal fraud.
To mitigate against email hoaxes that cause Wire Fraud, require your team to use a two-step or two-factor authentication for emails. The FBI urges companies to establish other communication channels — such as telephone calls — to verify significant transactions to help mitigate the possibility of losses.
The bottom-line is that Fraud IS avoidable. With the right precautions in place such as using trusted payment automation technology, you will prevent unauthorized ACH debit transactions, and avoid both employee and paper check fraud. The audit trail in your payment technology can and should be able to provide insight if any suspicious activity occurs.
7. Adopt New Payment Technology
After reading the above, you've learned the many benefits of payment automation and are finally deciding that your accounts payable department must get with the technological times of 2017 — but how do you select the best payment automation provider for your organization? Do your research and ask questions.
When searching for a payment automation solution, you should look for a company that :
- Only handles payments
- Puts customer satisfaction at the very top of its priority list
- Provides support day or night
- Monitors its help site tha24 hours a day
- Provides a 30 minute call-back assurance for any messages left on a help line
- Has survey results of 100% positive feedback… yes, you can find such a company!
Read More About Accounts Payable:
- 4 Initiatives for 2018’s Most Influential CFOs
- 5 Reasons Your Company Should Issue A/P Payments with Virtual Credit Cards
- Must-Attend 2017 Conferences for Financial Professionals - Part 2
- 5 Ways A/P Managers Can Save Time and Money with Accounts Payable Automation
- Breaking Through the Barriers to Accounts Payable Automation
Want to learn how to reach and keep your accounts payable New Year's Resolutions? Click the button below.