EIPP – THE ULTIMATE PAYMENT PROCESS
Today’s EIPP (Electronic Invoice Presentment and Payment) solutions take the invoice from submission to the appropriate payment, from ACH with dynamic discounting for discount maximization, to card processing for increased days payables outstanding, to check printing. All of these functions make EIPP the ultimate payment process! They allow B2B transactions to take place with better efficiency than ever before.
It is interesting, that with the expansion of payables automation and EIPP, there are so many solutions that just can’t offer the payment portion. IPAYABLES, an industry leader in EIPP, has expanded their payment options with a wide range of choices including: Customer System Delivery, ACH Transaction, American Express P-Card, MasterCard P-Card and Check Printing. iPayables also provides remittance detail to the supplier for purposes of cash application and reconciliation. It is interesting that so many of the payables automation solution providers stop prior to the payment step.
Here is a review of some of the payment processes you would expect to see in electronic invoice presentment and payment:
- CUSTOMER SYSTEM DELIVERY– This is where the electronic invoice is simply delivered to the customer to pay withing their system. It is commonly available withing their system. It is commonly available with most any automation solution.
- ACH WITH DYNAMIC DISCOUNTING– Most companies are familiar with ACH, but there are challenges in collecting banking information from suppliers. This may be why many payables automation providers stop short of payment. iPayables and most EIPP solutions that perform ACH transactions are collecting ACH related information online and most often following up with phone calls to retrieve or validate information. Aside from the convenience of the EIPP provider collecting this information, the greatest benefit of all could come from enhanced control over payment timein. According to the procurement trand publication Spend Matters, businesses can earn a 20 percent or greater annual return on their invested capital by making early payments to suppliers. With dynamic discounting, the customer is using their working capital to pay suppliers early, but they are collecting a great return on that investment in the form of high value discounts.
- PAYMENT CARDS (PURCHASING CARDS)– For customers who don’t have the working capital to do early payments themselves, iPayables recommends using purchasing cards as a strategic form of payment for accounts payable. Purchasing cards processed through iPayables net the customer a handsome rebate, but actually extends the payment terms. Suppliers are often willing to take purchasing cards as payment for early payment when an early payment from the customer is not available.
- AUTOMATED CHECK PAYMENT – Though a customer may want all payments paid electronically, there will often be some portion left as check. These can be managed with customer system delivery, or companies like iPayables will print the needed checks. This all-in-one approach allows the customer to focus on the supplier relations, audit and other value add efforts and not on paper printing.
A recent 2013 study by AFP the Association of Financial Professionals found that, “78 percent of organizations have integrated their ACH systems with accounting while 56 percent have done so for card payments,” said Jim Kaitz, AFP’s president and CEO. “AFP strongly supports electronic payments and we’re pleased to see the payment innovations now available to corporate treasurers.”
Improved technology and automation provide businesses with more choices when it comes to improving and expediting payment methods. The trend towards more flexibility and higher consumer demand has made traditional payment methods obsolete. Not only has there been a payment/ automation change in B2B, there has also been a methods change. EIPP with ACH and Dynamic Discounting is the latest evolution in payment processing, and it has become a popular and readily available option in accounts payable processing.