I have the pleasure of welcoming a “Payables Guest” today, Lynn Heitman, Senior Product and Marketing Officer, U.S. Bank Corporate Payment Systems. Heitman’s career in the payments industry spans 24 years beginning with the management of some of the first Affinity credit card programs in the 1980s and since then has worked in several areas of financial services. Lynn’s article today focuses on data integration/mapping as it relates to electronic payments.
In 2012, 56 percent of large corporations reported paying their invoices “all or mainly by check*” That’s surprisingly high, given the electronic payment options available today, but it’s progressive compared with mid-size companies and small firms, where 70-80 percent of all invoices are still paid in paper. It seems counter-intuitive that the smaller the organization, the less likely they’ve gone electronic, but the transition is often hampered by a lack of technical resources**
The automated file process requires some upfront development — specifically, the data file from an organization’s A/P system must be translated into a payment instruction format that can be read and acted upon by the bank making the payment on its behalf. Smaller organizations are less likely to have the IT capacity for that kind of development, as resources are dedicated to other business objectives and normal day-to-day activities.
Many financial institutions (FIs) have recognized this challenge and offer their clients “data mapping” services. Some assign specialists from their own IT department, while others partner with third parties. These companies provide “turnkey” solutions that integrate with most file outputting systems, including major ERPs, home-grown and legacy applications, spreadsheets and flat files. They often require little to no investment from the client, other than a commitment to a minimum level of annual spending volume.
Data-mapping services minimize the time, cost, and effort involved in transitioning to electronic payments. Organizations get up and running quickly and realize immediate benefits from reduced costs, increased productivity, bigger rebates – and improved cash flow.
Are data integration concerns hindering your shift to electronic payment? Have you asked your financial institution about data-mapping options that can positively affect your bottom line? If so, we’d like to hear about and learn from your experiences. Please post a comment below.
[*] Federal Reserve Remittance Coalition “Electronic Payments & Remittance Data: Pain Points & Solutions,” Dec. 2012.
[**] Cited by 65 percent of respondents in a 2011 joint U.S. Bank/Institute of Financial Operations survey of 280 A/P professionals.
