The current pandemic has altered where we are working from and how we execute key tasks. Utilizing financial services technology allows your finance department to operate a fully functional Accounts Payable (AP) process in a remote work environment. Firms also improve cash flow by transforming their AP process from a Cost Center to Revenue Stream.
Organizations who transition their A/P function into a revenue source will experience increased control and efficiency, enable remote payment execution, reduce internal staff time spent on payables, in addition to earning financial rebates. Extensive knowledge and insight are needed to help navigate pitfalls and achieve key success factors in Accounts Payable Optimization provider selection and implementation.
Here is how your organization can transition a cost center into a revenue generator.
Obtaining Financial Rebates
Many organizations are unaware of financial rebates available to them. The type of payment method determines the rebate. Also, the validity of the rebate is dependent on vendor enrollment and the number and value of individual payments. Financial rebates are derived from Interchange fees assessed to the recipients of e-payments. Rebates can be as much as 1.75% of the payment value, depending on the volume and frequency of payments.
Exploring Solution Options
Two primary AP solution options offer rebates for your organization. A ‘Comprehensive’ payment solution occurs when a payment file is uploaded, and the provider issues the proper method of payment. Conversely, the “E-Payable only” solution involves card payments to enrolled suppliers. Options such as these should be considered top of mind for companies who are looking to add a new revenue stream to their 2020 income statement.
Moving Away from Check Payments
Most organizations pay vendors via check, electronic check, or ACH. The invoice comes in and the payments are sent via their bank or directly to the vendor that submitted the invoice. However, as mentioned above, several service providers execute vendor payments via a virtual card platform. For this reason, some payment service providers have started specializing in converting traditional vendor payments to card payments.
The time is now to evaluate your opportunities to introduce a new revenue stream into your 2020 budget. As a result of following the simple steps outlined here, your organization will begin to benefit from a new revenue source. Understand the areas that can be improved today for your A/P function to contribute new revenues tomorrow.
About the Authors
Rob Katzman
Rob Katzman has been with ERA Group for more than 12 years. In that time, Rob has helped generate savings for various organizations in their treasury services, accounts payables, merchant card, small package freight, payroll processing, international shipping, FTL/LTL, uniform and telecommunication expense categories.
Mike Wolk
Mike is a Principal Consultant with ERA Group and has 31 years of experience in serving clients globally and across a range of industries. Leveraging his years of experience in Information Technology and Financial Operations, Mike’s focus is on helping ERA clients in the US with financial services operational improvements. Mike also works with ERA’s team of category specialists to identify and implement qualitative and cost improvement opportunities in a wide range of areas for his Washington, D.C., metro area clients.