Welcome to the final entry in a four-part series that previews Ardent Partners’ upcoming ePayments Rising research study. The pending research report, which is due to publish soon, highlights the evolving perception of electronic payment methods, their benefits and overall value, and how the rise in ePayment approaches actively contributes to the attainment of a veritable “next level” of greater financial operations.
The ePayments Rising research report, a landmark new study from Ardent Partners, details the evolution of the payment phase of the ePayables Framework and highlights the criticality of electronic payment methods in today’s fast-paced business environment. While the report focuses on several key themes that are prevalent in the ePayments world (such as the benefits of these methods, the barriers to ePayment adoption, etc.), there is one crucial aspect to the new research study that this truly groundbreaking in this arena: the achievement of a “next level” of financial operations success that is reached in part by ePayment adoption.
This “next level” involves a step “beyond” the realm of enhanced-yet-simple payment-processing functions, and relies on a series of not just electronic payment methods (commercial cards, ACH, wire transfer, etc.), but also technologies and solutions that can help organizations take advantage of variable financing and early payment discounts.
Ardent Partners believes the following platforms and solutions can assist enterprises in reaching this “next level” of success:
- Business networks are perhaps the “hottest” technology in today’s financial management marketplace simply due to the fact these networks traversed their existence as mere “portals” into valuable, strategic connections between businesses that can drive communication, spend insights, and facilitate a wide range of capabilities…especially electronic payments. Business networks support streamlined financial management processes (such as direct and electronic settlement), eliminate time-consuming inquiries on the supplier side (therefore adding more valuable depth to the AP staff) and provide real-time information, data, and intelligence regarding spending and business cash flow.
- Supply chain finance solutions represent a formidable means of capturing early payment discounts and driving more value from the payment process. SCF solutions leverage third-party funds to allow a supplier to sell an invoice to a bank or other financial institution at a discount as soon as they are approved by the buyer. Due to increased pressure from regulators or changes in underwriting/lending standards over the arc of a business cycle, supply chain finance technology can open a new door of credit for those enterprises that depend on it.
- Dynamic discounting is the name for both the process and the technology platforms that allow buyers and sellers to dynamically-alter the standard terms of payment. This solution allows AP executives and staff to make discount offers to suppliers based on the real-time cash needs of the greater organization (thus the “dynamic” form of discounting). While participation and maturity of these solutions are often the lynchpins to success, dynamic discounting offers an interesting means of achieving that “next level” of financial operations success.
Ardent Partners research concurs with the findings from the ePayments Rising research study: nearly 50% of enterprises believe that dynamic discounting technology (described above) is an ideal means of capturing early payment discounts, and 45% of organizations state that capturing early payment discounts is a priority within their financial management operations. With the “next level” now a priority for the finance function, it is these solutions (business networks, SCF, and dynamic discounting) that can present a valuable opportunity.