This article is posted in Smart Business and discusses aspects of the product solution space called integrated payables. The author discusses the product space with a bank exec at a U.S. regional who has a specialty in the middle market, where payments automation has been a higher priority since the onset of the pandemic. We recently released some member research on trends in the middle market. So, readers who may have interest in this timely payments subject may want to browse through a relatively quick piece. There are likely a few varied levels of understanding as it relates to the term integrated payables and the article provides one.
‘Integrated payables is a portal through which businesses can issue and reconcile payments. The interface allows users to automatically load payment files from their accounting software along with payment instructions from the portal’s vendor records so that payments are made through the vendor’s preferred method — ACH, virtual card, etc. It streamlines a process that, in the past, required different payment files or potentially different systems…
Those new to integrated payables receive training as well as help with the supplier enablement campaign through which the bank will reach out to a business’s vendors to determine their preferred method of payment and attempt to convert them to an electronic payment format.’
The piece goes into some of the benefits associated with integrated payables, including more automation and less reliance upon paper payments processing. Check fraud remains one of the risks to analog payments, as readers of the AFP Payments Fraud survey will know. One of the alternative types of e-payments that can be easily facilitated with payments automation is the use of virtual cards, which have an extremely low rate of fraud given the encrypted data and one-time usage features. Other types of payment controls and easier reconciliation methods are also benefits to be counted. Companies should be thinking about the subject in broad, end-to-end financial process terms, not as a single plug-in fix. Implementation typically solves for both buyer and supplier shortcomings, resulting in better relationships.
‘In addition to getting payment faster, suppliers typically receive detailed invoice data with electronic payments, making reconciliation much faster. Some systems even allow the reconciliation data to be integrated directly with a supplier’s receivables system…
Explore the options in the market to automate the payables processes because bringing a solution such as integrated payables onboard creates efficiencies that allow companies to focus more resources on their business and less on banking and payments.’
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group