Payments have not, historically, been viewed as tremendously important in most enterprises. This is no longer the case, and in fact payments are quickly taking on more strategic importance across a huge number of organizations; more enterprises have realized that making payments more efficient can provide huge savings, and electronic payments (ePayments) are the gateway to these cost efficiencies.
The new-found strategic focus of payments is not, however, the only reason that ePayments can be a boon to the wider organization. Financial operations in many enterprises have, in general, three classes of concerns—resource-related, system-related, and collaboration-related—all of which ePayments can address and in some cases solve quite handily. Today’s article focuses on the third of these classes, collaboration, and touches on three key collaboration-related concerns of current-day financial operations that ePayments can address.
Lack of Communication Between Procurement and Finance
In order to create a more perfect procure-to-pay (P2P) workflow, it is critical that procurement and finance be able to communicate effectively. One of the biggest reasons is that the information that both teams have, when shared, can improve operations on both sides of the equation. A manual, paper-based system makes communication demonstrably harder, particularly when the teams must take manual action if they wish to share information across functional boundaries.
With an ePayment system, finance can give procurement access to accurate financial data much easier than paper-based methods. This can increase the frequency of communication between the AP/finance and procurement teams, which has the potential to lead to improved results across the board. This increased communication grants both teams a window into information that can influence results on the departmental and business level; procurement will be able to more accurately make financial decisions, and AP/finance will gain more detailed supplier data as it regards payments.
Gap in Data for Spend Analysis
A thorough spend analysis can inform decisions at the highest levels of the organization. The more robust the spend analysis, the better the financial decision-making. A manual, paper-based payments system creates gaps in the raw data required for robust spend analysis for a few reasons, including difficulty of access. An ePayments implementation, on the other hand, fills in the data gap by allowing greater visibility into payments data overall. Electronic payment solutions also, for that matter, make access to this data simpler than a paper-based system, as AP is able to share the payments data through generating reports or even allowing individuals access to the system.
Project Overload in Accounts Payable
Manual methods of payment are replete with process inefficiencies and are a huge drain on AP staff time. The process to cut a paper check takes significantly longer than an ePayment, which means that AP team members spend less time on the financial projects that can have a strategic impact on the enterprise at large. An ePayment installation eliminates this lengthy process, resulting in giving AP back time the department needs in order to have a truly strategic impact.
Final Thoughts
Electronic payments benefit buying organizations in many ways, not least of which are the cost savings and process efficiencies that arise from eliminating paper checks from the AP workflow. Moreover, ePayments make collaboration across business units much simpler to achieve; with information clearly visible in a central location, teams such as procurement and treasury gain access to the data required for more nuanced decision making, and AP is able to spend more time on projects that have strategic importance. Collaboration is hugely important in the modern business environment; an ePayments system can simplify this enterprise capability tremendously, which can only bring about improved results in the short- and long-term.
Check out these related articles for more:
How ePayments Address Resource Concerns
Mind the Measurement “Gap” in ePayments
The Value of Better, “Deeper” Remittance Information in ePayments
AP Predictions for 2015: ePayments Will Become the Default
