E-payables framework:
- invoice receipt
- approval and inquiry
- validation
- settlement
Driving factors for focusing on electronic payments:
- need to reduce overall payment costs
- need for better cash management
- need to reduce risk of payment fraud
- need to reduce paper from A/P department
- need to ensure compliance with regulations
Best-in-class strategic actions:
- integrate payment solutions with existing A/P systems
- mandate suppliers to accept electronic payments
Main causes of improper payments:
- invoice / billing error
- vendor / supplier error
- duplicate invoice
- non-compliance with existing contracts or pricing
- non-compliance with company policies
Best-in-class technology capabilities:
- wire transfer
- automated clearing house
- commercial cards
- EDI / XML for remittance exchange
- EIPP
- spend analysis (to segment suppliers)
Benefits of electronic payments:
- drives cost savings
- accelerates transaction-processing
- removes paper from A/P department
- enables straight-through processing
- improves payment fraud control
Barriers to adopting electronic payments:
- suppliers not willing to
- lack of invoice-processing standardisation / automation
- lack of integration between electronic payment and A/P systems
- shortage of IT resources
- resistance to providing
To achieve best-in-class performance, companies must:
- standardise payment processes across the entire organisation
- institute a collaborative environment between the key units involved in payments and cash management
- leverage spend analysis solutions to segment the supplier base into appropriate electronic payment categories
