Ivalua Payments Part II: Using Payments to Become the Customer of ChoiceInvoicing
COVID-19’s impact on business has drastically changed how supply chains function and how we, as end users, work. It has forced the world to rethink, pivot and adapt to digital technology. It has also exposed the gaps that result in inefficiency and costs, plus the blurred relationships between employees, vendors and customers. The largest identified gap between procurement and payment is the Accounts Payable (AP) process. In order to truly cross this chasm, your business does not require major construction, but simply a supplier self-service portal. This portal acts as a bridge between the Invoice and the Electronic Payment. The solution is available today, in the shape of the innovative Invoice-to-Pay platform from Ivalua.
Immediate Benefits of the Interconnected Payment
The immediate cost benefits of a seamless vendor journey are the instant cost savings, but these are just the tip of the iceberg. The ability to create a touchless Procure-to-Pay process will reduce the opportunity for fraud. With two-factor authentication and embedded real-time change processing there are no payment files to edit. In addition, the time savings introduced by removing duplicate approvals and cutting checks are immense.
By streamlining the whole process into one interconnected payment, an organization gains increased control over working capital while unlocking payment discounts at the micro-level in an automated and touchless environment.
Strategy for Change
The solution to the AP chasm is remarkably simple if the problem is considered from the vendor’s perspective. The gig-worker, typically mobile and digital savvy users, usually work for few employers, but no more than four or five. They will have online banking and they are remarkably familiar with online shopping. Ultimately, from an Accounts Payable perspective, they are tail-end suppliers, or even a one-time supplier. These individuals are therefore looking to receive purchase orders and contracts electronically; they are going to check for changes or new business via their mobile device. They are going to submit invoices electronically from their device, and they are going to check for payments on their phone. They are also going to maintain their business accounts via their device.
These vendors will happily sign into a website, update their bank details, and agree to orders. They will happily flip an approved order, receipt, or timesheet into an invoice. However, they will expect electronic payments at the transaction level, not consolidated at the end of the month. This allows them to track payments and manage their personal accounts more granularly. What is exciting about this possibility is that by delivering this journey to the gig-worker, you also address the needs of other larger suppliers. One process for every supplier, large and small, with greater flexibility, mobility and a seamless user journey.
How to Deliver Interconnected Payments
To deliver this new journey, you need to look at the payment process backwards. The first step is to unlock the supplier portal and provide real-time visibility of the transaction. This will not only reduce unwanted supplier inquiries, but it will also add a secure change request process for the supplier to add their bank account for electronic payment.
The second step is to move tail-end and one-time suppliers on the portal and enable payments to these vendors to process electronically at the transactional level. This does not mean there is no consolidation of payments, just more secure and robust payments, without the cost overhead of checks or reconciliation impact of cards. Once these two steps have been made, not only is Accounts Payable ready for the gig economy, but it is also set-up for electronic payments across the supply chain.
Ivalua ensures that the Invoice is pre-matched by the supplier or automatically within the Accounts Payable journey to create a touchless payment process. This enables an Invoice to be okay to pay within moments of its receipt and allows the organization to control when the funds are released to the supplier. However, Ivalua goes beyond this by offering the possibility to settle the payment from within the same workflow. This unlocks the early payment opportunities, while covering the payment of cross-border and domestic invoices without the barriers of onboarding the supplier to a card program. This reduces fraud risk, cuts the cost of payments, and reduces unwanted inquiries. The result is an end-to-end Invoice to Pay journey that puts Accounts Payable in total control of its DPO (days payable outstanding).
Becoming the Customer of Choice
By being able to provide this interconnected payment journey to any supplier, from large-scale enterprises to the one-person gig business, your organization is more likely to become the customer of choice. You will increase supplier satisfaction, reduce internal workload and reduce overhead through a touchless payment operation.
If you are ready to modernize the way your organization processes payments and bridge the AP chasm, connect with Ivalua today or check out our website to learn more about our new I2P Payments solution.