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November 12-14, 2018 | Las Vegas
7 Steps to Strong Supplier Adoption in Electronic Payments
Jim Scott ACOM Solutions
Mark Brousseau Brousseau & Associates
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Learning Objectives
November 12-14, 2018 | Las Vegas
• Why electronic payments?
• The latest benchmarks: opportunities & challenges
• 7 steps to strong supplier adoption of electronic payments
• Solutions to your biggest adoption challenges
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How AP Staff Spend their Time
November 12-14, 2018 | Las Vegas
Transaction processing, 84%
Value-added activities, 16%
Source: IOFM AP Department Benchmarks
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How Supplier Payments Consume AP Staff Time
November 12-14, 2018 | Las Vegas
• Setting up suppliers• Gathering payment details• Collecting tax forms• Keying invoice information• Matching invoices with POs
and shipping documents
• Tracking down purchasers• Searching for lost or
misplaced invoices• Setting up payments• Reconciling payments• Resolving payment issues
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How Businesses Pay Suppliers
November 12-14, 2018 | Las Vegas
39%
30%
6%
11%9%
5%
Paper check ACH Virtual card P-card Wire transfer Other
What % of payments do you make via the following methods?
Source: IOFM Future of AP Survey
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The Tide is Turning Against Paper Checks
November 12-14, 2018 | Las Vegas
18%
38%
16%
12%
9%7%
Paper check ACH Virtual card P-card Wire transfer Other
How do you expect you will pay suppliers 3 years from now?
Source: IOFM Future of AP Survey
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The Tide is Turning Against Paper Checks
November 12-14, 2018 | Las Vegas
18%
38%
16%
12%
9%7%
Paper check ACH Virtual card P-card Wire transfer Other
How do you expect you will pay suppliers 3 years from now?
70% of businesses have a strategy in place to increase their percentage of electronic payments to suppliers.
Source: IOFM Future of AP Survey
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Why organizations still use paper checks
November 12-14, 2018 | Las Vegas
• Familiarity• No technology required• Easy delivery of remittance data• Perceived control• “Everyone accepts checks”• Float while check is in mail
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Benefits of electronic payments
November 12-14, 2018 | Las Vegas
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Paper Checks Cost 30X as Much
November 12-14, 2018 | Las Vegas
• Collecting, storing and maintaining supplier bank account data
• Printing, signing and mailing paper checks
• Logging into multiple bank portals
• Managing multiple payments systems
• High bank fees• Replacing lost checks• Responding to supplier
payment inquiries• Manually reconciling
payments/invoices• Adding temporary staff as
volume increases• Fraud losses
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Why Pay Suppliers Electronically
November 12-14, 2018 | Las Vegas
Source: IOFM Future of AP Survey
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Complete the “Last Mile”
November 12-14, 2018 | Las Vegas
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Accounts Payable is Becoming More Strategic
November 12-14, 2018 | Las Vegas
9.52%
42.86%
25.17%
21.77%
0.68%
Significantly higher strategic importance
Slightly higher strategic importance
Unchanged (we are of high strategic importance)
Unchanged (we are of low strategic importance)
Slightly lower strategic importance
How will your AP department’s strategic importance change?
Source: IOFM Future of AP Survey
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Transforming AP Into a Profit Center
November 12-14, 2018 | Las Vegas
Source: IOFM Future of AP Survey
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Why Senior Management Cares
November 12-14, 2018 | Las Vegas
13%37%
28%18%
30%30%
13%11%
26%37%
33%29%
9%15%
NoneDays Payables Outstanding
Percentage of invoices paid to termsValue of early-payment discounts offered
Percentage of early-payment discounts capturedPercentage of supplier payments made electronically
Percentage of duplicate supplier paymentsNumber of suppliers in our vendor master database
Number or percent of touchless transactionsCost savings and cost avoidance
Cost per invoice processedValue of annual card rebates/rewards
Annual fraud lossesAccruals
Which metrics will be more important to senior management?
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The Strategic Importance of Electronic Payments
November 12-14, 2018 | Las Vegas
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Biggest Barriers to Electronic Payments Growth
November 12-14, 2018 | Las Vegas
Source: IOFM Future of AP Survey
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7 STEPS TO STRONG SUPPLIER ADOPTIONElectronic Payments
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Step #1: Take a hard look at your suppliers
November 12-14, 2018 | Las Vegas
• Current relationship• Current payment type• Current payment terms• Requests for early payment• Payments types accepted• Number of transactions• Average transaction amount
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Step #2: Don’t leave things to chance
November 12-14, 2018 | Las Vegas
• Comprehensive outreach & communications strategy• Project objectives & goals• Rules of engagement• Critical action items• Milestones• Clear timeline
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Step #3: Strive for driving value with 100% of your suppliers
November 12-14, 2018 | Las Vegas
• Leverage payments partners to contact & enroll suppliers• Tracking down contact• Paperwork• Supplier registration• Administrative tasks• Strategies for increasing
supplier adoption
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Step #4: Educate Suppliers on the Benefits
November 12-14, 2018 | Las Vegas
Faster Payments
Rich Remittance
Data
Streamlined Reconciliation
Secure Payments
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Why Suppliers Accept Virtual Cards
November 12-14, 2018 | Las Vegas
• Electronic• Fast• Transparent• Easy• Secure• Green
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Step #5: Pay suppliers the way they want to be paid
November 12-14, 2018 | Las Vegas
Card ACH WireCheck Global
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Use a single file for all payment types
November 12-14, 2018 | Las Vegas
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Step #6: Don’t be left holding the bag on support
November 12-14, 2018 | Las Vegas
• Onboarding• Contact updates• Bank changes• Payment status• Payment entry• Technical issues• New payment types
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Step #7: Never stop onboarding suppliers
November 12-14, 2018 | Las Vegas
• Plan to regularly review your vendor master file• New suppliers• New supplier contacts• Revised payment terms
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Case Study: Menorah Manor
November 12-14, 2018 | Las Vegas
• Community-sponsored not-for-profit senior healthcare organization• Located in St. Petersburg, FL• $10 million annual spend• 300 checks monthly• 350 total suppliers• All supplier payments made via check
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Business issues
November 12-14, 2018 | Las Vegas
• Wasted time and labor• Frequent payment delays• Lots of supplier inquiries regarding status• Strained relationships with key suppliers• Weak negotiating position with suppliers• Missed early payment discounts
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Benefits of electronic payments to Menorah Manor
November 12-14, 2018 | Las Vegas
• 70% supplier adoption• Single file for all payment types• Freed up to 50 hours of staff time each month• Annual cost savings of $12,000• No payment delays• Fewer supplier inquiries• Early payment discounts
• Cash-back rebates
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How to sell CFOs on electronic payments
November 12-14, 2018 | Las Vegas
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What are your biggest adoption challenges?
November 12-14, 2018 | Las Vegas
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Contact Information
November 12-14, 2018 | Las Vegas
Jim ScottACOM [email protected]
Mark BrousseauBrousseau & [email protected]
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