So, here we are with the final entry of our four-part series that has been putting the benefits (and a few barriers) of ePayments under the microscope. In the first three parts of the series, we’ve focused quite heavily on accounts payable (AP) and accounts receivable (AR), and paid particular focus as to the savings made by switching to an electronic payments initiative in terms of both money and resources. In this final post, we are now going to be considering the technologies needed to achieve ePayment success, and how they may indeed be implemented into the business organization.
The evolution of electronic payments has enabled great savings (up to 70% per payment processed) and greater ease and visibility of cash flow and other finance functions. However, there requires still one further step beyond this initial realm to make ePayments implementation uniquely prosperous and begin to achieve that all-important ‘next-level’ of financial operations success. The simple yet enhanced payment processing functions that are enabled through electronic payment methods rely on a series of technologies and solutions that equip organizations to take advantage of things like early payment discounts and variable financing.
To reach this ‘next level’, enterprises should seek to take assistance from the implementation of the following platforms and technological solutions:
Supply Chain Finance
Supply Chain Finance (SCF) solutions drive considerably more value from the payment process by allowing an impressive means of capturing early payment discounts. SCF works by leveraging third party funds by allowing the supplier to sell an invoice to a bank (or other financial institution) as soon as it is approved by the buyer. The model benefits both of the original parties – the supplier receives payment (from the third party) promptly, and the buyer can take advantage of being able to delay payment. SCF technology can indeed open up a new cache of credit for those enterprises that depend on it.
Business networks create valuable and strategic connections between businesses and actually represent one of the ‘hottest’ technologies in today’s financial management marketplace. An effective network drives communication, remittance information, and facilitates such functions as electronic payments. Business networks enable streamlined financial processes and eliminate delays incurred through inquiries on the supplier side. Direct and electronic settlement is swift throughout the efficient business network, and real-time information and business intelligence regarding cash flow and spending is clearly provided for all parties.
Dynamic discounting allows both buyers and sellers to dynamically alter the standard terms of payment. This means that AP staff and executives can make discount offers to suppliers based on the present cash requirements of the organization. Research from Ardent Partners finds that 50% of enterprises believe that the ideal means of capturing early payment discounts is through the implementation of dynamic discounting technology.
This concludes our series into the evolving world of ePayments. Traxpay enables and empowers all of the solutions outlined in this series by connecting banking, enterprise data, and B2B trade into a single end-to–end solution for supply chains – providing one source of truth. The ‘next level’ of financial operations success is there for the taking, and we’re here to help you to create value and visibility in your business.