How to Maximize Your ePayables Initiatives

ARTICLE - ePayables has raced to the top of the finance agenda.

Seventy-one percent (71%) of accounts payable leaders plan to deploy electronic payments technology, the Institute of Finance and Management (IOFM) reports. Even 44 percent (44%) of leaders who describe their departments as “largely automated” say they plan to further automate their electronic payments.

Three percent (3%) of accounts payable departments now pay all their suppliers electronically, IOFM says.

The sudden shift to remote working accelerated the transition to electronic payments. Many accounts payable departments couldn’t get into the office to make paper check payments to suppliers.

The growth of electronic payments also is no surprise when you consider that accounts payable departments of all sizes are looking for ways to reduce costs, ensure accurate payments, strengthen supplier relationships, deliver value to the organization, and extend Days Payable Outstanding (DPO) – a measure of the average length of time it takes for businesses to pay their supplier invoices.

Paying suppliers electronically via ACH and virtual card meets all these objectives.

Strategies for improving electronic payments adoption

But electronic payment success is not assured without proper planning. Here are eight strategies for ensuring that your ePayables initiative is a success:

1. Work with key stakeholders, such a treasury and procurement, to define organizational goals.
2. Look for an ePayables solution that works with your enterprise resource planning (ERP) platform, so you can have streamlined payment file processing that leverages your organization’s existing standards and real-time visibility into the status of all payments.
3. Ensure that your ePayables program supports multiple payment methods -- including ACH, virtual card, and even paper check – to support the needs of all suppliers while achieving operational efficiencies and cash-back rebates from electronic payments.
4. To drive ePayables adoption, make sure your electronic payments solution provides suppliers with standard electronic remittance information across various payment methods.
5. Be sure the ePayables solution provides real-time reconciliation for the financial close.
6. Jumpstart your ePayables adoption efforts by having your solutions provider review your vendor master database to identify businesses that accept virtual card and ACH payments.
7. Develop a plan for notifying your suppliers that you can now pay them electronically. Be sure that all communications to suppliers appropriately reflect your organization’s brand.
8. Continuously track the progress of your ePayables initiative and identify adjustments.

Following these strategies will help your accounts payable department achieve optimal results from its ePayables initiative, resulting in lower costs, cash-back rebate possibilities, and happier suppliers.

Want more help developing your electronic payments strategy?

Contact iCloudAuthority to speak with one of our payment experts. Schedule a demonstration to learn more.