In a world where the speed of business increases moment by moment, and the next big competitor is right around the corner, enterprises can ill afford to let business value slip through their fingers. This is, however, what many Accounts Payable organizations have done by allowing manual, paper-based methods to persist in their supplier payment operation. Paper checks may have functioned “well enough” in the past, but ePayment solutions have started to capture the attention of finance and AP leaders. This is in part due to a more holistic (and expanded) focus on the role of AP related to both invoice and payment processing.
The increase in new ePayments solutions reaching the market has also triggered greater interest and focus in the area. But the most manual, labor- intensive part of the AP process has yet to receive wholesale automation. It has been slowly improving over the last five years and according to data from Ardent Partner’s 2018 State of ePayables Research report (click here to download before its gone on September 28th), 59% of all B2B payments today are paid electronically with ACH and card payments being the most used formats.
Depending on if you are an optimist or a pessimist, you might see the ‘payments’ glass as half empty or half full. I prefer to go the optimist route and view the results as encouraging. Don’t get me wrong, in this day and age, with the breadth of electronic payment options available from solution providers such as AvidXchange, Nvoicepay, Finexio, American Express, and MasterCard, I truly believe there is little reason the percentage of enterprises paying its’ suppliers electronically shouldn’t be much, much higher. However, AP has made tremendous strides over the past five years and we are definitely moving in the right direction.
While there has traditionally been a greater focus for AP departments automating the front end of the process, more and more organizations are beginning to understand that ePayment solutions are vital to realizing the full potential of AP and P2P automation.
ePayments On the Rise
Ardent Partners research has consistently shown through the years that manual, paper-based processes are inefficient and cost significantly more than electronic payments. The expectation of less paper in the process should mean that more organizations will experience cost and process savings in the near future. Paper-based payments worked fine once upon a time, but just as new technologies have removed other legacy business processes (the paper invoice, the rolodex, etc.), new ePayment solutions and processes have made it strikingly less economical and efficient to pay suppliers with paper checks. There is significant business value hidden in every B2B payment that an enterprise makes, and with the recent developments and innovations in the market, combined with an increased recognition of the emerging business value of ePayments, enterprises need to continue to look at these new ways to drive financial value.
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