For many businesses, manual payment execution is still a painful reality, making B2B payments costly, inefficient, and susceptible to fraud risks. Additionally, paper-based accounts payable processes take up time that could be better spent on more strategic tasks geared toward improving your bottom line. If day-to-day accounting pains are plaguing your business, it may be time to upgrade to an integrated payables solution.
Under a typical payables model, businesses have a separate disbursement product or solution for each payment method: check, ACH, card, wire, etc. As such, each payment rail requires its own integration with your ERP system, resulting in multiple, disparate workflows for making payments. Additionally, the control mechanisms differ between payment methods: checks need to be signed, ACH payments must be initiated via the payer’s account, and wires may require a phone authorization. Further, the data that is available to you and your vendors varies by type. While all rails can move money from point A to point B, the true value lies in the level of data, security, and visibility available to the customer.
Integrated payables (IP) solutions solve for the multiple integration points, controls, and data disparities associated with traditional B2B payments. IP offerings automate payment execution across payment types in a unified payments workflow, while providing a single, consistent experience for vendors. Below, we explore the topic of integrated payables and why these offerings may be right for you and your organization.
What is Integrated Payables and How Does It Work?
Integrated payables is a method that improves the payments process for AP and finance teams by automating and incorporating all payment types (including virtual card, ACH, checks, and more) into a single, streamlined payment process that negates the need to perform the manual tasks associated with B2B payments. IP is conducted via one secure online payments solution that facilitates payment processing and management, resulting in increased cost savings, improved visibility and control, and accelerated business growth.
Integrated payables solutions integrate directly with your accounting system. Once invoices have been approved for payment, IP solutions will retrieve the payments information from your ERP system, collect money from you to facilitate payments, and disburse payments accordingly on your behalf. This allows customers to execute payables via a single payments workflow and make timely and accurate payments, providing organizations with consistent data reconciliation and control mechanisms across all payment types.
What Are the Advantages of Integrated Payables?
For any organization, cutting paper checks and manually processing payments wastes time, money, and resources. With integrated payables solutions, companies can completely remove the manual work associated with payment processing. Making and managing payments becomes easier and organizations realize the following benefits:
1. Reduced Cost of Payments and Streamlined Operations
On average, between hard costs and soft costs, each physical check costs about $5 to process. With an integrated payables offering, businesses can reduce payment processing costs by up to 80%. IP can optimize the payments mix and affect a low-cost, high-value model. With virtual cards, not only are the transactions free but organizations earn cash back rebates from making payments, which can offset or even exceed payables costs.
In the process, an integrated payables solution helps organizations save time and free up internal resources. Historically, the AP or finance department spent a significant amount of time printing, signing, stuffing, and mailing paper checks. With electronic payments, employees no longer spend time on manual payments processing or delivery. This results in a faster and more efficient payments process and allows finance professionals to focus on higher value activities.
“Step back and look at your existing team, who’s responsible for the disbursement function? How much of their time is going towards that? What issues are they running into? Where have you had challenges? A lot of those are going to be solved with a solution like MineralTree. I would assess your situation and don’t be intimidated with MineralTree because it’s click and play and you’re off and running.” – Brent Sitarski: CFO, Touchstone
2. Improved Business Relationships
Integrated payables solutions provide users with complete visibility into the status of payments via one single, centralized platform. Providing real-time access to payment information increases transparency, improves business relationships, lessens inquiries and dispute potential, and drives business growth.
3. Increased Cash Flow
Payables automation reduces the time needed for payment processing turnaround. Electronic payments allow for faster posting and give businesses a more accurate view of current cash flow. Integrated payables also offer organizations the ability to select payments dates allowing businesses to take advantage of early payment discounts.
4. Improved Payment Security
Best-in-class IP solutions include advanced payment security features like two-factor authentication, payment authorization with multiple approval tiers, segregation of duties, payment limits, and more. Advanced IP solutions, like virtual cards, leverage a method called payment tokenization that allows companies to pay for specific transactions without running the risk of account compromise. In fact, virtual cards offer the highest-level of payment security when compared to other electronic payment types. These security features, coupled with the ability to easily review and approve transactions from one single platform, reduce the risk of fraud and improve overall payment security.
5. Better Data Insights
In an online bill pay model, customers must manually register each bill in their accounting system and then mark it paid even though they’re paying from somewhere else. This process is disjointed, leaves a lot of room for error, and makes it difficult to connect the dots between invoices and payments. Because they initiate payments directly from the accounting system, integrated payables solutions connect the invoice to the payment, ensuring seamless and automatic reconciliation.
6. Ensure Business Continuity
Lastly, integrated payables solutions help ensure business continuity, an issue that has become more pronounced with the COVID-19 pandemic. AP teams that relied on manual processes and paper checks have seen their AP process break down completely in a remote working environment. Integrated payables solutions allow businesses to execute their payments process anytime, anywhere – without the need to go into the office to print and sign checks.
Why Do You Need Integrated Payables?
The lowest value activity in a finance function is writing checks. If you want to ditch paper checks (and move to e-payments and virtual cards), reduce the cost of making payments, mitigate B2B payments fraud risks, and seamlessly reconcile your accounting system without undergoing a substantial IT project, you need integrated payables.
With solutions like MineralTree, organizations are armed with the tools they need to execute and process payables easily, securely, and efficiently. By automating manual processes, integrated payables provide organizations with a way to manage the payments process without increasing expenses – eliminating wasted internal resources and allowing organizations to focus on driving growth.
MineralTree offers both integrated payables and Invoice-to-Pay solutions depending on your specific needs. If you’re looking to streamline your payments process and move away from paper checks, consider integrated payables. However, if you’re also struggling with manual processes to code invoices and chase approvals, Invoice-to-Pay can streamline the invoice management workflow and automate payments execution. MineralTree also has the broadest coverage in the marketplace, integrating with more than 160 accounting systems. If you’re in need of a payables overhaul, it’s time to automate and optimize your payment processing with integrated payables from MineralTree.