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AP Made Easy: Benefits and Best Practices of a One File Payment Process

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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.

Learn More

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. 

 

Reduce Your 2016 Federal Tax Liability

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We can help you lighten your load AND improve cash flow!

If any of you (or your clients) own commercial real estate (CRE) with improvements valued at $300,000 or more, there may be real opportunity to reduce your 2016 tax bill. There is still plenty of time for our firm to identify potentially substantial federal tax deductions associated with your property to apply to your 2016 federal taxes.

There is likely significant tax deductions and increased cash flow hidden within the walls and boundaries of your CRE property

Through our industry unique “fully engineered and accounted” cost segregation methodology, ELB and its team of engineers identifies every component in your building, whether it that qualifies for a shorter tax life or not. As such, we not only identify your deductions, our study serves as an asset management report too. Our competitors typically charge extra for this service.

Through a cost segregation study, owners benefit from the time value of money  

ELB’s methodology will identify all available deductions (allowable by the IRS) to improve your cash flow. It is like treasure hidden within the walls and grounds of your property. This level of detail provided by our firm not only provides significant cash infusion and asset detail; as a byproduct, it also provides for compliance with the 2014 I.R.S. Tangible Property Regulations .

Not sure your building qualifies? Essentially all types of CRE can qualify; office buildings, medical facilities/offices, hospitals, multi-family apartments, shopping centers, restaurants, auto dealerships, car washes, golf courses, industrial/flex space, self-storage, residential single family rentals, etc.

While “fully engineered and accounted” cost segregation is the core of our business, ELB offers a suite of solutions designed to improve the overall tax and financial performance of CRE assets. We leverage our ‘elb360’ approach when evaluating a project to determine what other tax and energy solutions may apply. These include the EPAct 2005 179D & 45L, R&D Tax Credits, or an ASHRAE Energy Audit and ongoing management to reduce NOI and improve the cap rate. For planned new construction, we can consult with the architect and GC to incorporate minimal changes that maximize the ‘tax friendly’ status of a building – just to name a few.

Whether you have just completed (or are planning) construction, a recent acquisition, a renovation/remodel, or even have a 10 to 15-year-old property that has never had a study – there is the opportunity to realize cash flow and federal tax deductions.

Contact us to discuss how these benefits may apply to your specific properties. And if it is appropriate in your circumstance, we will conduct a ‘no-cost’ Feasibility Assessment on properties for 2016 tax incentives.

Frank Buonemani is Partner with ELB Consulting, Inc. (www.elb360.com ), a commercial real estate services firms focused on helping its clients realize federal tax and energy incentives. For more information about these incentives, he can be reached at frank@elbcostseg.com.

 

 

Supplier Participation Is the Key to a Successful Virtual Card Program

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Many companies are implementing virtual card programs to increase the efficiency and security of their accounts payable department.  But just as a chain is only as strong as its weakest link, a virtual card program is most successful if more than 50% of a company’s suppliers participate in the program. 

One of the key benefits of a virtual card program is that it adds revenue to your bottom line by rebating approximately 1-1.5% of your annual AP spend.  As costs rise many companies are looking to add revenue and doing so while increasing efficiency and security makes moving to a virtual card program an easy decision.  Unfortunately, many of these companies are implementing virtual card programs, but are leaving a lot of money on the table by not implementing a quality supplier recruitment program at the same time.

Most companies are very comfortable with the status-quo whether they are paying by check or ACH.   While it is not difficult to switch to a virtual card program, it does require the supplier’s acceptance.  Many are happy to do so – but you have to ask.  The good news is that you shouldn’t be the one doing the asking.

If you are considering a virtual card program, make sure to ask what the provider does to assist you in signing up your suppliers to the program.  A company that specialize in this is going to be far more effective than a bank.  Ask about success rates and what their process looks like.  As much as you may think you will find the time to make these calls yourself, unless you are used to selling it is unlikely that calling suppliers will rise to the top of your to do list.

Many companies are very comfortable with their ACH system and may need some coaxing to change to a new system.  If the vendor recruitment is done well all the benefits of a virtual card such as enhanced remittance data/speed of payments will be spelled out.  That’s why as you look for companies to consider as a virtual card provider, make sure to ask about their vendor recruitment program, or lack thereof.

Lost & Found has a comprehensive outreach program to call every one of our client’s suppliers to sign them up for the program.  Call us today at 704-662-0074 to learn how easy it is to turn your AP into a revenue generator.

Gimme 3 Steps, Gimme 3 Steps, Mister

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We are all in a critical time as businesses are constantly looking for ways to lower expenses and still increase their bottom line. One of the top expenses any business pays is their IT/telecom services. We need our phones, internet, and data, so we can’t eliminate those costs. Our vendors have told us we are getting the best rates, so “it is what it is!” I hate that statement, but it is what it is. I want to tell you how my company saves our clients 17% on average on these very expenses without switching vendors.

STEP 1: REVIEW

You have to review your invoices at least quarterly, if not monthly. This review is so that you can see what changes from one month, or, one quarter to the next. There are an unbelievable amount of charges that mysteriously find their way on to telecom invoices. Call it whatever you want, but these charges will not typically be caught through variance reports and can add up rather quickly over time. Use these reviews to identify features that are not necessary or frivolous and get rid of them! Not utilizing all of the lines you are paying for? Get rid of them!

There are a lot of times in which vendors will only give you a lump sum bill with little detail…this is intentional. You see these vendors are trying to save money also, and one way for them to do that is to cut down on the paper bill by eliminating the detail. I worked for AT&T a long time ago and one of the things that will stick with me forever is that they told us that if a customer calls in, then just “trust and adjust”. Keep in mind that my call center at the time took several million calls a year and that amount only represented approximately 2% of the base of all of their customers. WOW! Really? What about the other 98% of the customers out there with the same error or overcharge? And this is why AT&T is a big monster rich company, and why the FCC is always lurking over their heads. But let’s face it, all vendors most likely do the same thing.

STEP 2: CSRS

You need to order a copy of all of your Customer Service Records (CSRs) for each of the invoices you receive. CSRs are the record by which your invoice is built, it is a record of every feature and product that you originally ordered. The problem is that every feature has to be entered manually by a human, and we all know that we as humans are prone to mistakes. Since you may only get a lump sum, non-detailed invoice, you will not know what you are paying for. The CSR will tell you everything. It is the guide of all guides and will be the route to saving money or even recuperating money for any errors that may exist.

Once you have reviewed the CSRs for any errors and overcharges that are embedded, you will now go to the tariffs for the services you are paying for. By reviewing the actual tariffs that the vendors submit, you will be able to identify whether or not the rates you are paying are being billed at “rack rates”. Rack rates are the highest allowable rates that a vendor can charge you. Tariffs will also outline some of the contract rates and discounts that are available for committing to a term, usually 12, 24, or 36 months.

All you have to do next is look at any contracts that you have for these services and compare them to what the tariff states. This will ensure you are paying the correct rates for the services that are under contract and outline the appropriate terms and conditions of the contract. By triangulating the CSRs, tariffs, and any contracts you have, you can ensure that you are being billed accurately and that your company is protected by the best terms and conditions allowable.

STEP 3: ICB PRICING

Now you have to ensure that you are going to get the absolute best pricing ever? “But Shawn, you just said that the tariff has all of the rate information in it, and that is what I am paying. How can I get any better than that?” That is a great question, and what step 3 is all about. I am confident that most of you have a network of peers that you can contact to compare notes. If not, start building it immediately. This is how you can utilize the ICB pricing that is available through most vendors. ICB stands for Individual Case Base pricing and is similar to the car salesman telling you to hold on while they go talk to their manager. Ask! You never know what can be accomplished just by asking. However, in order for ICB pricing to come into play, you have to have something that will incentivize the vendor. I have a partner at so and so who has this service and is only paying X. These are part of the negotiating tactics that you must do to maximize your savings across the board.

Let us know how this works for you, we have built our entire company by doing this for our clients. Of course it helps that we have a great staff of former telecom vendor employees, but that should not prevent you from following these steps on your own. If you do get in a pinch, then add me to your network of friends, and I am sure we can figure it out together. And as always, we hope you enjoyed your reading!

Written by Shawn Krahenbuhl – slk@espyservices.com
Follow Shawn on Twitter or connect with him on LinkedIn

Edited and published by Morgan Cummings – morganc@espyservices.com
Follow Morgan on Twitter or connect with him on  LinkedIn

5 Reasons Why Single-Use Virtual Cards Are Suddenly Everywhere

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In the past year, virtual card payments have grown like never before. Predictions for virtual card usage show that this growth is likely to be exponential: According to research from First Annapolis, virtual card payments will double from $83 billion in 2015 to $160 billion in 2018, and explode to over half a trillion by 2024.

When we refer to virtual cards, we are speaking specifically of those that utilize single-use ghost account, or SUGA, technology. At their core, these are essentially a digitally tokenized card number. With a single-use ghost account, a unique number is generated for each virtual card payment. After the payment is made, the single-use number is invalid and cannot be reused.

Why are so many organizations adopting these single-use virtual cards? Here are 5 key reasons:

1. Tight controls that minimize errors and reconciliation issues. Buying organizations can set controls on single-use virtual payments that limit the amount, date, merchant and even MCC codes, among other parameters. For example, if you send a single-use virtual payment to your office supply store, you can specify the exact amount that the merchant must process to receive payment (down to the penny), and you can limit the date range during which that virtual payment is valid.

2. Improved payment and remittance data. With virtual payments, you can choose to include additional information with the payment, such as project codes or cost center info. Plus, this added data can be more robust than with other payment types (for example, ACH limits any added data to 80 characters).

3. Enhanced data capture. In addition to the added data mentioned above, virtual payments also provide the ability to include customized data capture fields. For example, if you’re paying for a hotel expense, you can include a customized data capture field for the booking ID number. Streamlined and simplified reconciliation. Virtual payments include a full audit trail with real-time data analytics.

4. Faster payments for suppliers. Who doesn’t want to get paid faster? Suppliers can reduce days sales outstanding and increase working capital with the speed of virtual payments.

5. Lower costs when compared to plastic cards. Since virtual cards are digital, there are no costs associated with issuing, mailing and maintaining plastic cards. 

If you would like to learn more about implementing a virtual card payment system for your organization please contact Jeff Lavoie, VP of Sales at Lost & Found Inc. at 704-662-0074.

Chad Clay is SVP of Client Management at Kontrol Payables, a Lost&Found partner focused on commercial payments solutions.