How to Streamline Supplier Payments

ARTICLE - If it seems like there's never enough time in the day, you are not alone.

Accounts payable professionals spend 84 percent of their workday bogged down by repetitive, manual tasks such as keying payment data, chasing down information, reworking errors and mistakes and responding to phone calls and e-mails from suppliers about where things stand.

Even accounts payable managers typically spend more time each day on transaction processing than on the managerial tasks they hired them to perform, the Institute of Finance and Management (IOFM) 's AP Department Benchmarking and Analysis Report soberly reports.

All these manual tasks leave little time for accounts payable to focus on higher-value activities that help drive business growth and success – things like data analysis and stakeholder collaboration.

Why supplier payments are inefficient

Paying suppliers is one of the biggest drains on an accounts payable professional's time. Paying suppliers with paper checks requires staff to print checks, track down signatures, stuff the checks into an envelope, respond to calls and e-mails from suppliers about their payment status, research and replace any checks that get lost in the mail, and manually reconcile bank account statements.

Things aren't much better when it comes to paying suppliers electronically. At most businesses, accounts payable staff must log into separate bank systems for each method to pay suppliers and reconcile the respective bank account statements they receive from each payment system.

Making matters worse, many businesses pay suppliers through multiple banks and bank accounts.

Some businesses pay a third-party online payment processor to pay suppliers. While this approach eliminates the operational burden of paying suppliers, it results in higher costs and less control.

All told, managing payments consumes one-quarter of the typical finance team's time, studies show.

And the challenges with paying suppliers only get bigger as a business grows.

The reason supplier payments are so time-consuming is the disjointed way that businesses manage them. Most businesses rely on a hodgepodge of point solutions for paying suppliers, each with unique logins and passwords, file formats, account requirements, and proprietary integrations.

The result is inefficiency, unnecessary complexity, data silos, and more significant potential for risk.

Eliminating friction in the B2B payments cycle requires businesses to take a fresh approach to the way they pay suppliers. What they need is a single platform for paying suppliers using any method.

A new breed of ePayables solution built inside the NetSuite ERP does just that.

From directly within the NetSuite ERP, accounts payable staff can use a few clicks of the mouse to select the bills they wish to pay and the credits they want to use. The solution then generates a file conforming to their bank's specifications, containing all the approved payments to suppliers.

Businesses can make payments via check, virtual card, international wire, domestic and international Automated Clearing House (ACH) transactions, global electronic funds transfer (EFT) payments, Zelle Pay, and other payment methods. Some "Built for NetSuite" solutions that run inside the NetSuite ERP also support multiple currencies and multiple subsidiaries, streamlining global commerce.

Once created, a file automatically transmits to the bank for immediate or scheduled payment using Secure File Transfer Protocol (SFTP). Files also can be manually uploaded to a bank. As payments are processed, the platform creates a vendor payment transaction in the buyer's ERP.

A previous day settlement file can be imported through NetSuite using their built-in functionality.

The benefits of using a single platform to pay suppliers

Using a single solution to submit bulk payment requests for every supplier, and payment method or bank, is helping some accounts payable departments improve staff productivity by 200 percent.

As a result, some accounts payable departments have reduced their processing costs by 95 percent.

And the technology is proven in a wide range of verticals, including wholesale distribution, high-tech, biotech, manufacturing, cosmetics, food distribution, security, and healthcare medical supplies.

All this is music to the ears of weary accounts payable professionals. Paying suppliers with a single "Built for NetSuite" platform that runs inside NetSuite can free them to focus on the things that matter most.

Like helping drive growth and deliver value.

For more information on how to streamline your supplier payments, contact iCloudAuthority for a free consultation.