ePayment Solutions: When the Easy Answer Isn’t So Easy

With all of the buzz around technology and its impact on AP administration, costs, service, payments, and more, it’s a wonder every company hasn’t taken their operations to new heights. In theory, it’s a no-brainer; in reality, transitioning from paper-based to digital isn’t seamless. For as much value as ePayment solutions bring to an organization, some companies simply aren’t ready to implement the technologies that get them to the next level.

AP’s Payment-Related Challenges

In their 2015 State of B2B Payments report, Ardent Partners examined payment-related challenges facing companies that haven’t managed to hit the ground running with new technology. Let’s take a look:

Lack of visibility into payment data (34%)—Many AP professionals recognize that business intelligence is the ticket to becoming less tactical and more strategic. Access to data enables them to make efficient, fact-based decisions and real-time tools afford them increased accuracy and precision in planning. It all adds up to a better-managed cash flow, easier budgeting, and enhanced collaboration with managers in different areas across the company, from Procurement to Treasury. (See Unlock a Treasure Trove of Insights in AP Data for more insights.)

Payment approvals take too long (27%)—Aside from doing little to help supplier relationships, a lengthy approvals process can can be costly: when it results in late supplier payments, the company can have less favorable contract terms. It can be a painful reality that competitors who “act faster” usually get better incentives and lower prices.

Getting the budget to invest in automation (22%)—The Ardent Partners report authors point out that survey participants looking for money in the budget for new technology may be ahead of the game: they’re aware that they need to make improvements and are open to solutions. Not having finds in place, however, means AP still needs to secure support from higher-ups to find the resources to finance their initiatives.

Have ePayments Reached Their Tipping Point?

In a general sense, businesses are using more and more technology—adapting to a changing world, learning what works for them. Each new successful investment makes it more likely they’ll embrace more tech-fueled solutions in the future. That’s one of the reasons that electronic payment technologies are reaching their “tipping point.”

According to Ardent Partners, now is a viable time for stakeholders to get up to speed on the value AP technology solutions can bring to their organization. If their challenges and needs are known (and understood) across all levels of management, they can start making changes that result in greater efficiency and cost-savings. Perhaps ePayments’ time has come.

But not so fast.

When Paper Checks Work “Well Enough”

Better data, lower costs, better connectivity…these are the perennial wish-list items of AP professionals. Yet despite their importance to so many companies, ePayment solutions are not being adopted en masse—at least not yet. The Arden Partners survey has insight into that. Survey respondents’ top barriers to ePayment adoption are:

• Supplier doesn’t possess technology/resources to participate – 42%
• Lack of integration between electronic payments and accounting systems – 27%
• Difficult to convince suppliers to accept electronic payments – 27%
• Obtaining/maintaining supplier banking information – 24%
• Costs borne by the supplier (e.g. card fees)

Facing these barriers, even the most enthusiastic supporter of AP technology has their work cut out for them. Internal resistance to change—or a supplier base that won’t get on board—can put progress on the back burner. (Read Corporate Culture and Payments Technology for more.) Fortunately, the pros of ePayment technology outweigh most of the cons, and the message is getting out. New insights into how to bring AP operations up to the trends are coming soon. For now, you might be interested in reading Promoting Virtual Cards Among Your Suppliers. (need to insert URL)