With so many different ways to pay suppliers, B2B payments can get complicated quickly. Some suppliers accept card payments, such as P-cards and virtual cards. Other suppliers prefer ACH deposits. You may even have to occasionally send a wire payment. And yes, of course, some suppliers still require payment by check. So what’s the best way to manage all of these different payments? Increasingly, many Accounts Payable departments are turning to one file payments to address the challenge of multiple payment types and bring unprecedented ease to the AP process.
Understand the Benefits
Wondering about the benefits of using one file with consolidated payments? Here are a few:
- Multiple Payments Streamlined into One File: With one file of consolidated payments, all of your supplier payments — regardless of payment type — are gathered and submitted for processing in one file from your electronic accounts payable system. That means you don’t have to separate card, ACH, wire, and check payments into different files. The simplicity of all B2B payments processed in one file is vital to streamlining AP workflows: Using one-file payment processing reduces the number of files you have to manage and generate each time you’re ready to process payments, ultimately making it quicker and simpler than traditional processes.
- Ease of Reconciliation: A key benefit of using one file for B2B payments is the ease of reconciliation. After the single consolidated payment file is processed and payments are made, a customized reconciliation report can be uploaded directly to your ERP system without any manual intervention. Instead of having to manage multiple reconciliation processes and bank uploads, your reconciliation process is simplified into just one report, ultimately saving valuable time and resources.
- Pricing Optimization: Another benefit is the ability to optimize pricing by processing all payments through one file. Organizations save on traditional bank fees by negotiating and better controlling check and ACH processing fees. Of course, a virtual card program can actually provide an alternative revenue source, as well.
Make an Informed Decision
While many banks and financial institutions offer one file with consolidated payments through an automated AP platform, not all solutions are equal. When considering a one-file payment solution, ask yourself these questions:
- Will I have to make any additions or changes to my ERP system for one-file payment processing? With the right one file system, you don’t have to do anything in your ERP system to indicate how you want various suppliers to be paid: Your provider should keep track of that for you through a payments hub, which determines the appropriate way to pay eone-file ach supplier based on your supplier profiles. The only thing you should have to do is provide one file of all payments for your suppliers each payment cycle, and funds will be disbursed accordingly. It’s that simple.
- When I want to change how a supplier is paid, is it easy to do? Make sure that the solution you choose is flexible to changes, as more and more suppliers are moving away from paper checks to electronic payments. And occasionally you may need to order a new card or change the card number used to pay a supplier. As these changes happen, your one file system should empower you to quickly and easily change the payment type for that one supplier without creating hassle in your payment process.
- Do I ever make payments with single-use virtual cards? Since single-use virtual cards are used for one transaction only and require a new 16-digit virtual account number with each use, they can be challenging to manage. A good one file process should generate all virtual card numbers for you, removing that burden from your AP department.
- Will I be able to see all outgoing payments in one comprehensive system? Visibility is important. While your ERP system remains your system of record, your one file platform should also show all payments made, regardless of payment type, for tracking purposes. Having your outgoing payments data in one place eliminates the need to check multiple systems to view different payment types.
If you’d like to learn more about using one file with consolidated payments, please contact us for additional information. If you’re interested, we’ll be glad to provide you with a complimentary assessment of your current AP processes.