According to an Association for Financial Professionals (AFP) study funded by JP Morgan Chase, more than 70% of organizations surveyed are struggling to convert to accounts payable automation and electronic payments.
Despite liking the idea of financial technology innovation, these companies cite employee, customer / supplier hesitance and IT barriers as fears the hold them back from the transition...just to name a few.
Read on for the fears, the myths...and the facts of AP payment automation.
1. "Accounts Payable Automation Will Result in Me Losing My Job" Fear/Myth
Whenever a new streamlining process or automated workflow is introduced, the initial thought is that it will result in a reduction of jobs. Fact is, often times, as mentioned in a recent Wall Street Journal article, the result is more jobs are created. In the instance of automating payments, AP staff can now focus on what is truly important — managing finances, not managing mountains of paper.
You can quickly turn into the company hero by being the one that initiates the change to more efficient and cost-saving electronic payments!
2. "Accounts Payable Automation Will Result in a Higher Demand on IT" Fear/Myth
Yes, this can be the case but not always. It all depends on the accounts payable automation solution provider that you choose. However, fact is, you will find that there are platforms which require minimal IT involvement.
Seek a cloud-based accounts payable automation platform that provides integration services that minimize your requirement for your IT team's support throughout the implementation. The ideal solution requires NO PROGRAMMING, as well as standardization for sending remittance detail built into the payment module. Doing so will expedite the migration to the new platform and make your IT department head happy.
You can actually free your IT resources from months of implementation work by choosing a turn-key system setup that is pre-configured for you and handles integrating to accounting systems at the file level (you want to be able to just hand over a sample of your current payment file and let the solution provider handle the rest for you). They can direct as much or as little as they would like to ensure it's as secure as they like; but they aren't doing all of the "heavy-lifting" in the process.
3. "There is More of a Fraud Risk with Electronic Payments" Fear/Myth
Fact is, there is a much higher risk of fraudulent activity with paper checks. According to research survey conducted by the Association of Financial Professionals, 77 percent of fraudulent payment activity was targeted toward paper checks.
This payments fraud study found that:
Checks are targeted more often than other payment methods by those seeking to committing fraud attacks.
Credit/debit cards that deploy Chip-and-PIN validation is proving effective in preventing credit/debit card fraud.
Single-use virtual card accounts add additional security given the tight controls applied to card number issuance, handling and specific authorization amounts.
4. "My vendors will not accept an ePayment but if they do, I will have a lot more work" Fear/Myth
This myth needs debunking. Fact is, once your vendors realize the benefits of accepting wire,virtual card or ACH payments, they will happily jump on board, ask why you didn't introduce them to it earlier and THANK YOU! Why?
First, by accepting electronic payments, your vendor will receive:
Improved financial controls - no lost or stolen checks
Prompt settlement - minimize payment delays, collection costs or disputes
Detailed remittance information - including a list of invoices paid
Preferred Vendor Status - receive payment earlier
Choose a payment automation provider that has an effective and streamlined way to collect vendor / payee information to enable ACH payments.
It is imperative that you choose a platform with the capability of a secure vendor/payee “self-enrollment” in the your ePayment program in order to streamline the process for you and your team and removes a sizable burden of migrating to electronic payments.
Also find the solution that provides back GL reports of cleared cards to make your payment settlement much easier!
5. "There is Cost Associated with Transitioning to Payment Automation" Fear/Myth
False! Not true! Fact is, By reducing or no longer printing checks, you will reduce your business costs.
Checks cost on average $3.50 per unit. Reducing the number of printed checks reduces your overall cost.
You will even earn a Cash-Back Rebate – You can earn on average greater than 1% cash back of the A/P spend that migrates to the virtual card. Typically this can average approximately 35% of your total A/P spend. The rebate $$$ add up!
Now that you can disseminate the fact-from-fiction of Accounts Payable Automation — and maybe had some of your own myths debunked, you can STOP letting fear hold you and your organization back.
You now see that accounts payable automation technology simplifies payment processing for your business. By eliminating the fears and ultimately the barriers that are holding your company back from payment efficiencies, you will experience more conveniences than ever before.
Find the solution that does what's needed to overcome these barriers. Migrate to electronic payments and experience all of the advantages of payment automation. Now is the time to discover the convenience and efficiency of electronic payments.
In today's digital world, no one really uses checks regularly for their personal transactions. Ask anyone outside of the finance industry the last...
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Listed by CFO Tech as one of the Top 10 Accounts Payable Solution Providers 2018 and 2019 and by CIO Review as part of the 20 Most Promising Corporate Finance Tech companies for 2017, OnPay Solutions streamlines processes for accounts payable by automating invoice processing and payments.