Five Strategies to Uncover Value in Procure-to-Pay through E-Payments

When it comes to procure to pay (P2P) chains, there is a wide gap between loungers and leaders, so much so that cost-per-payment in best-in-class companies is ten times lower than in others. With procurement having one of the largest volumes within an organization, it pays to minimize costs and drive value.

But, you may ask, how are these high-performers achieving these significant savings? What other hidden value are they uncovering across the procure-to-pay (P2P) chain?  What payment strategies and technologies can you adopt to attain best-in-class?

A recent webcast by Ardent Partners and SAP Ariba highlighted how organizations in an ever-changing and ever-evolving technological world can unlock value by improving payments to suppliers through B2B e-payments, which are revolutionizing processes and replacing traditional check-based methods.

This comes as leadership seeks improved reporting and analytics, reduced costs, improved supplier connectivity, and better visibility in B2B Payments, as highlighted by an Ardent Partners survey. Executive leaders are looking to big data to answer questions, and many have turned these questions to AP departments.

However, standing in the way of the increased speed and visibility into payments is the continued drain that paper checks and manual processes have on organizations, costing said organizations grotesque amounts of money: $0.89 for best in class organizations (top 20%) vs. $10.65 for all others.

To save money, increase supplier acceptance, reduce time spent paying the bills, and more, Ardent Partners panelist recommended the following five strategies:

1. Leverage E-Payments to Increase Visibility into Cash Flow: With great visibility comes improved ability to manage cash and liquidity risk. This further enables a partnership between AP and treasury, allowing for a better grasp of data and value throughout the supply chain.

2. Develop and Execute a New Supplier Payment Strategy: From dynamic discounting to supply chain finance, an improvement to your supplier payment strategy offers more effective planning and decision-making into how cash flows through your organization.

3. Use Payment Information to Improve Collaboration with Procurement: As AP and Treasury grow closer, the next department with which AP needs cohesion is that of procurement. If procurement gains more information regarding payments, the organization sees improved reporting to track supplier performance and contract compliance—unlocking more value.

4. Develop a Platform to Improve Supplier Relationship Management: Improving AP’s relationship with suppliers results in more accurate payments, and better visibility for the suppliers, who directly benefit from the improved transparency and speed that come from e-payments.

5. Use E-Payments to Streamline Processes: Significantly cheaper than traditional payment through check, e-payments reduce operational costs and allow you to gain operational efficiencies, bettering your business’s overall success.

As the speed of business ramps up, organizations that can adapt are poised to gain from the analytics and efficiency posed by improved payments, better relationships with treasury and procurement, and ultimately, an evolution of your organization.

Learn more about unlocking business value through e-payments by watching the entire webcast and downloading the Ardent Partners whitepaper on the State of B2B Payments.

Want the latest in payments news? Follow WEX on LinkedIn and Twitter, and read some of the latest procurement news:

• Four Barriers to E-Payments Adoption (and How Virtual Cards Overcome)
• The 3 Components of a Successful Tech-Fueled Procurement Transformation
• Fintech: Reinventing the Financial Services Industry
• The Top Payment Trends Shaping Strategic Thinking in 2016, Part 1
• The Top Payment Trends Shaping Strategic Thinking in 2016, Part 2
• Searching For A Customer Experience in the Payments Industry