{"id":3550,"date":"2018-06-14T18:37:23","date_gmt":"2018-06-14T18:37:23","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=3550"},"modified":"2022-09-06T09:36:00","modified_gmt":"2022-09-06T09:36:00","slug":"driving-up-usage-levels-for-electronic-supplier-payments","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2018\/06\/driving-up-usage-levels-for-electronic-supplier-payments\/","title":{"rendered":"Driving Up Usage Levels for Electronic Supplier Payments"},"content":{"rendered":"

Introduction<\/strong><\/span><\/p>\n

A variety of electronic payment options for suppliers have been around for a number of years now, but a significant percentage of vendor payments are still made by paper check.\u00a0 This is especially true in North America, which tends to lag behind the rest of the world in this area.<\/span><\/p>\n

Since the 1980s, when considering improvements to the Accounts Payable process<\/a>, companies around the world successfully deployed solutions that evaluate Accounts Payable as one component of the Procure-to-Pay process. This yielded improved efficiencies between functional areas and often eliminated the need for invoices entirely with pay-on-receipt processes.\u00a0 However, when it comes to making payments, while the global norm is 100% electronic, for many in the United States, printing and mailing paper checks continues as a common method for how payments are processed.<\/span><\/p>\n

Company Experience<\/strong><\/span><\/p>\n

On a recent Peeriosity Peercast, a retail, manufacturing, and media company with $5 billion in revenue, shared their experiences in providing more electronic payment options to their suppliers.\u00a0 Having significantly reduced the size of their Accounts Payable organization over the past number of years, efficiency in all aspects of their operation was of key importance, including the payment of suppliers.\u00a0 With over 400,000 invoices and 80,000 supplier payments made each year, even a small improvement in processing efficiency can result in significant savings for the company<\/a>.<\/span><\/p>\n

Utilizing a multi-pronged approach to providing electronic payment options, the first payment alternative discussed by the company was its One Card program.\u00a0 Accounts Payable partnered with Global Procurement (GP) to identify payment method guidelines, which they then incorporated into the Supplier Payment Policy.\u00a0 A key part of the rollout of the One Card program was the mass communication sent to Global Procurement and to all internal businesses, including subsidiaries, on the revised policy.\u00a0 Back-office audits were also set up in business expense to ensure guidelines were being followed.\u00a0 They then pulled reports to identify payments that could have gone to One Card and e-mailed internal employees directly about transitioning these suppliers to the One Card program.\u00a0 It has since taken a few years to see the real benefit of this transition, but they are now very happy with the results, including a significantly larger rebate from the card provider.<\/span><\/p>\n

Having had a negative experience with their existing virtual payment provider, they decided to outsource the entire supplier payment process (Virtual payment, checks, ACH<\/a>) with the exception of wire transfers, in 2018.\u00a0\u00a0 They utilized a phased approach to outsourcing these payment methods and immediately, in January 2018, began a payment method campaign with their suppliers, in which only a few industry groups were not a part of this effort.\u00a0 At this point in time, the campaign is approximately 60% complete, with significant conversions from check to ACH and ACH to Virtual payment.<\/span><\/p>\n

Some of the key learnings identified during this payment method transition include the following:<\/span><\/p>\n