When is the best time to automate supplier payments? Today’s cloud payment solutions are relatively easy to implement, and deliver such a large return for a nominal investment that there’s never truly a bad time. But the best time is when accounts payable can take a leadership role, rather than having automation thrust upon them by circumstances. This is an opportunity for a rare career win for accounting.
For decades, AP has been a low priority for technology investment within most organizations, and they have had their heads down just trying to keep up with the workload in front of them. Leading a technology transformation is the furthest thing from their minds. Unlike marketing, which has become one of the biggest consumers of technology in the organization, when people in AP have a problem their reaction is to throw people, not technology at it.
And, when it comes to payments specifically, there’s more of a tendency to look to their bank because up until recently, banks were the only game in town. But banks haven’t innovated in B2B payments for decades. Accounting professionals may not even be aware that a new generation of cloud and API-enabled fintechs are finally making supplier payments efficient.
Waiting for a trigger
Even if they are aware, after so many decades of hardly any technology innovation, there’s a tendency to sit back and wait for some kind of trigger to drive automation. That might be a new CFO, an ERP upgrade, a merger or acquisition, or simply facing the prospect of hiring more people just to write checks as the company grows. But, there’s a big difference between passively letting change happen and taking the opportunity to lead.
All of these events cause an organization to pause and reflect, and look for better ways to do things. If your AP department is still living in an archaic, paper-bound world in comparison to the rest of the business, that’s certain to draw scrutiny, and rightfully so. The absurdity of writing checks in a day and age when people are paying with smartphones and using fewer checks in their personal lives will eventually drive businesses to look for a better solution. There’s an opportunity here to take the lead in bringing change.
Moving from paper checks and a patchwork of bank payment programs to a totally automated payment solution in the cloud returns an average of $5 per payment. If you’re making 100,000 payments a year, your organization will see benefits of $500,000 a year, every single year. There are comparatively few opportunities in accounting and finance to lead a technology initiative with this kind of positive bottom line impact.
The easiest place to automate
Not only that, payments is probably the easiest area of AP to automate, because it’s at the tail end of the process. Scanning and workflow automation require more complex integration and change management programs for multiple stakeholders. In contrast, automating payments takes only a few hours of AP time and has minimal impact on stakeholders outside of AP. The savings from process improvements and lower costs can even help pay for other automation initiatives.
For the first time in a long time, thanks to cloud technology and open APIs, there is something new under the sun for B2B payments. There are not many times AP has an opportunity to make the kind of impact they can by automating payments. This is a low-cost, easy implementation and there’s never a really bad time for it. The best time is when it’s your idea and you’re driving the solution. Don’t wait for someone else to steal your thunder. Step forward and lead.
Karla Friede is CEO and Co-Founder at Nvoicepay. Friede has 20 years of experience in management, finance, and marketing roles in both large and early stage companies. Along with the founding team, she has grown Nvoicepay into the leading B2B Payment Network. Prior to founding Nvoicepay, Friede was President and CEO of Zevez Corporation; VP of Marketing for GeoTrust (acquired by Verisign in 2006); Co-founder of The Ascent Group; Director of Marketing at Mentor Graphics, and part of the PBAS team at KPMG. Friede received an MBA from Harvard Graduate School of Business.