After you’ve decided to use an automated accounts payable (AP) system, your business will need to begin transitioning vendor payments. A good automated AP system provider will assist you in transitioning vendors to more efficient payment methods through vendor campaigns.
Benefits of Vendor Campaigns
Service providers normally conduct vendor campaigns via mail, email or phone. Vendors are encouraged to begin using electronic fund transfers (EFTs), which include ACH, wire or credit card (vCard) payments. Originating electronic payments is easier and significantly cheaper than using paper items. Additionally, electronic payments often include extra benefits, like ease of reconciliation and the ability to generate revenue, which help increase the ROI of an automated AP system.
What a Vendor Campaign Should Include
- Communications to vendors that help prepare them for the upcoming campaign. Effective communications can significantly impact the success of the vendor campaign. Vendor communications should include notification that a client has invested in an automated AP system, as well as information about who will contact them and when, how to register for an EFT, and how to troubleshoot issues.
- Vendor validation tools and process. Because electronic payments clear faster than check payments, validation is a crucial step in the campaign process. Most automated AP system providers offer a vendor portal at no cost to help validate vendor banking information and store remittance data. Because this information is stored in the portal, there is no need to also store it in an enterprise resource planning (ERP) system.
Many automated AP system providers use proprietary systems to help validate account information. This could include electronically verifying a bank account and routing number with the vendor’s bank or requesting a blank check or bank note validating the vendor’s information. When looking to purchase an automated AP system, it is important to compare and contrast the validation practices of a system provider to ensure they will meet or exceed your risk policy.
- Vendor analysis. Not every vendor should be included in a vendor campaign because some cannot or do not want to receive EFT payments. Automated AP service providers should analyze your vendors prior to starting a vendor campaign. This is typically done by requesting basic vendor information, such as name, address and current payment type. Some system providers will take this one step further and request additional payment data to help develop a vendor campaign that prioritizes vendors most likely to switch to EFT.
Questions to Ask Your Automated AP System Provider
The quality and frequency of vendor campaigns can differ widely across the automated AP system industry. When evaluating your options, it’s important to ask questions about how your provider will support your business through a vendor campaign and as you onboard a system.
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