How Full Stack CFOs Are Using ePayments to Improve Their Bottom Line
June 8, 2016
Today’s CFOs face more pressure than ever before—innovation in business technology and globalization are driving organizations to be highly productive and efficient, especially in how they manage their finances. For many companies, this means adopting business software to automate financial processes, and for CFOs, it requires becoming a financial technology expert. The modern, tech-savvy CFO is often referred to as the “Full Stack CFO”—a finance leader that is at once a steward of its company’s critical assets, and a catalyst for change in the company’s financial management strategies. Full Stack CFOs understand the importance of using market-leading accounting, payables, and receivables technology to make more informed financial decisions and bring greater returns. By adding technology into their resource mix, these CFOs can strategically improve their company’s financial position and bottom line.
When it comes to automating payables, Full Stack CFOs are moving away from manual, check-based processes by adopting electronic payments (ePayments) software. This move is partially spurred by the high costs of printing and mailing paper checks, but also by the insufficient data security and control of check payments. Invoice management and ePayment solutions, on the other hand, eliminate printing and mailing expenses, and offer highly advanced security and reconciliation technology to streamline and secure payables.
The most common ePayment methods used by today’s mid-market organizations are ACH, wire, and commercial card solutions. While each of these tools improves the data security and cost of payments, commercial card solutions are particularly appealing to Full Stack CFOs. Cards enable real-time visibility into finances by updating transactions as they occur, and provide more accurate data than other forms of ePayments. Payment times and working capital management also improve under card-based payables. Mailing and handling delays prevent companies from estimating when checks will be cashed, and they must hold the funds in the meantime. With commercial cards, payments are quick and statuses are immediately updated. The fast and effortless payment process allows the CFO to balance short-term investments and cash needs with long-term goals and cash requirements.
Using commercial card solutions is also a strategy to protect against data security breaches, fraud, and theft. In most cases, if a system is illegally accessed and sensitive data is compromised, federal regulations only protect consumers from fraud. Financial institutions are often left liable for the breach and will not reimburse businesses, leaving the company at a loss. Commercial card providers are addressing this concern by offering fraud prevention guarantees that ensure that organizations are also protected. In addition, organizations can add a layer of security before payments are made by setting up controls on every commercial card transaction, such as purchase limits, required approvers, or merchant code restrictions.
Commercial cards are also gaining popularity because of the savings they provide. In the middle market, companies have less to spend on automation tools than in the enterprise market. However, when ePayments are integrated into the AP automation process, companies see a significant offset to the cost of automating. This comes both from streamlined processes and reduced processing costs, and from transaction rebates issued by commercial card payments. Companies will actually find that their payables processes have become a new source of revenue, especially when a large portion of their suppliers accept card payments.
Despite the appeal of commercial cards, mid-market companies often experience a few internal issues when moving to adopt. Some organizations hesitate because they fear their suppliers will not accept cards, forcing them to continue sending checks for the majority of their payables. Another concern revolves around security; although checks do not offer any strong form of data security, many companies are not properly educated on the many security controls available with commercial cards. They believe that by automating their payment process, they will make sensitive data vulnerable to hackers, when the reality is that today’s software provides extensive and advanced protection against such breaches.
Another barrier comes from the fact that many of today’s AP solution providers do not offer an integrated ePayments tool, and companies that are already dependent upon a legacy AP system fear the difficulty of adding a payments solution. Very few offerings on the market provide both AP automation and the ability to automate the invoice to payment process; most solutions only offer a tool that updates remittance information in the accounting system. If companies do try to adopt a standalone ePayments tool, many are discouraged by the pricing and complexity of solutions that are not tailored for the middle market.
These adoption barriers are legitimate concerns, but are not without solutions. The key to achieving secure and affordable payables automation is to work with a holistic AP and ePayments provider that understands the needs and concerns of the middle market. One such company is MineralTree, a provider of end-to-end AP lifecycle automation software that includes electronic payments. MineralTree’s solution meets the invoice and payment management requirements of mid-market companies with easy-to-use tools, a user-friendly interface, and an affordable price point.
MineralTree offers a robust set of invoice management tools, including invoice receipt, scan, and capture capabilities, invoice routing and exception management, and invoice approval workflow. MineralTree automates the entire invoice to pay lifecycle with advanced commercial card solutions that provide security controls, real-time visibility, and rebate programs. In addition, MineralTree offers check automation for suppliers that will not accept card payments, allowing a company to complete the AP process. MineralTree prints and mails checks on behalf of its clients, and automatically updates payment statuses.
MineralTree’s flexible platform allows companies to tailor the solution specifically to their needs without purchasing extra features, which results in less training need, shorter implementation time, and a quicker ROI. In addition, the MineralTree system integrates seamlessly with many leading mid-market ERPs, including QuickBooks, Netsuite, Intacct, and Microsoft GP. MineralTree also provides extra security and protection for clients’ data, guaranteeing online payment security with SilverGuard—an insurance policy that protects against online payment fraud for up to $100,000 a year. This allows MineralTree’s clients to save on costs while minimizing risks.
With a fully integrated invoice to pay system like MineralTree’s, a company’s entire AP process becomes simplified, with more visibility and control in payables. However, before investing in financial software, organizations and their CFOs must justify the cost of the solution with a sound business case. Fortunately, holistic AP automation solutions like MineralTree’s consistently and quickly generate savings and a high ROI, and provide a host of features and benefits to persuade company decision makers of the value of automation. With the solution, Full Stack CFOs can improve their company’s cash position by gathering rebates, and by eliminating manual procedures, they create more scalable processes that support future growth. In all, a solution like MineralTree’s provides the perfect blend of finance and technology for the Full Stack CFO.
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