- A PUBLICATION OF OnPay Solutions-

ePayments? Why & How to Enable Them…

TABLE OF CONTENTS

1 Introduction

4

Bank Services — What is the Cost?

10

Your ERP— Why It Isn’t Working for You

15

ROI— Converting to ePayments

19

Considering the Cloud? Ask These Questions First!

22

Conclusion

Introduction

- A PUBLICATION OF OnPay Solutions-

Do you feel as though your bank is always announcing new fees for services you need? Do you feel that your ERP system isn’t always WORKING FOR YOU? If you could make a contribution of close to $300,000 to your organization (YES, you read that number correctly!) just by switching to an ePayment/ payment automation platform would you? Do you know which questions you should ask BEFORE converting to a cloud-based payment automation platform? If you said YES to any of the above questions, then this eBook is for you!

Bank Services — What is the Cost?

CHAPTER ONE

Bank Services

Banks and other financial institutions are in the business of aligning themselves with their customers to provide more and more services to allow payments to be handled in a simple way. They encourage their customers to rely upon their service bureaus to move their monies. But what is the cost of such services?

Banks offer to: •Print Checks •Originate ACH Payments •Process Wire Transfers •Process Purchasing Cards •Process Virtual Credit Cards Banks want to make life easier for the weary and sometimes overwhelmed Controllers and CFO’s who must do more in less time and with less money than ever before. Additionally, Financial Institutions are reaching out to businesses of all sizes from small businesses to corporate customers to provide a breadth of services to keep businesses in business.

They will offer to manage: Cash Management Property & Casualty Insurance Credit Services Payroll Services 401K Management And the list goes on and on. Just review the business services areas of any bank or financial institution and you will find that they provide much more than the traditional bank services we listed earlier. The centralization of these services and payment services allows the financial institution to ensure that that company is married to them and only them, they hope. Speaking in terms of payments only, while many of the countries’ leading financial institutions provide many valuable services and do relieve the day-to-day operational stresses of managing payables, they do so at a profit to themselves. Banks may be able to provide services at a reduced cost per transaction for moving money, but they are certainly making money while doing so.

Those per transaction costs may very well add up to a cost savings to many businesses. In the long run, however, maintaining control of the actual process of issuing payments very well may be THE most cost effective way to handle payments. Remember, banks are in the business of making money. Our recommendation to those seeking payments consulting advice is to always remain bank neutral. Bank neutral is a term we have used repeatedly when advising customers or prospective customers ranging from small and mid-sized businesses to major corporations when we counsel them that in order to be in control of their payments process…they should actually issue their payments. We recommend that they seek solutions from multiple sources and always demand that those solutions work within their existing Accounting and IT structure.

Upgrading to an outsourced option provided by a bank ultimately gives the bank control of the process. It also means that companies must pull reports out of the bank-controlled reporting system and then merge those reports with other reports…and so on. Analysts or clerks have much merging and adjusting or calculating to do. We believe that savvy CFO’s and Controllers can begin to plan and budget to maintain control of their payments and keep costs at or below those bank-projected costs per transaction. They will also further reduce bank fees and connections by batching payment files to the bank of their choice. Meaning that organizations with multiple operating companies with different banking relationships in different locations can each be held to the same standard operating procedures when issuing payments or that all payments can be handled by one central office yet issued by the bank accounts of their respective locations. There are many, many reasons we suggest for processing payments in house and remaining bank neutral. Keeping control of the process is just one reason.

Your ERP— Why It Isn’t Working for You

CHAPTER TWO

Your ERP

When you think streamlining Accounts Payable or Automating Payments by issuing ePayments you may be under the impression that your ERP can handle this process. As many know, the "functionality" may be purchased through an "add-on" module. This then prompts an immediate call to your ERP liaison or consultant to help with the process. Doing so may become a cost prohibitive endeavor, that if not out of budget, may seem not worth the time or effort. First let us say that ERPs are amazing business tools. And, ERP consultants are talented people who help many companies through a myriad of complex needs -- ideal for engagement with enterprise management, business support, merchandising, supply chain planning and supply chain execution projects.

We stop short of recommending them for enabling Accounts Payable Automation. Here’s why. ERP Consultants are not Payment Technology Experts. And, when it comes to making payments, expertise matters. Seek a solution that focuses exclusively on making payments

10 Reasons Your ERP Isn't Best for Payments: 1. Manipulation of file ERP provides is required for ePayments 2. No CLEAR separation of duties inside of payment module 3. Lack of adequate payment transaction security along with

appropriate transmission security 4. Lack of a clear audit trail 5. Deficient in SOX compliance 6. Insufficient to meet bank transmission requirements - may

require more add-ons. 7. Doesn't allow your company to be BANK NEUTRAL 8. Doesn't allow the payment record details to be reconciled

easily 9. Unable to provide same-day (same hour) support for trouble tickets related to issuing payments 10. The implementation process can take too long...many, many months or years to go live with payments.

Ensuring that this checklist of payment requirements is properly orchestrated sounds like it could be a time consuming and long process. It shouldn't be. What to do then?

•Seek a solution that works with the ERP system and can accept the file without any manipulation and can take you live with payments in 60 - 90 days.

•Seek a solution company that only handles B2B payment automation. Ask them if “payments is all they do”. Check off every barrier on the list above. Period.

•Seek a company that has a track record of opening and closing cases within the same business day and many times in under 30 minutes.

•In business, making payments is mission critical. Rely on payment technology that is proven and, if ever needed, supported immediately upon request.

ROI— Converting to ePayments

CHAPTER THREE

ROI

By converting to ePayments, an organization can expect the following ROI: 1. Reduced Cost of printing checks – checks cost on average $3.50

per unit. Reducing the number reduces the overall cost. 2. Efficiency Gain – there is the cost of time and effort associated

to the manual process of printing checks, sorting, hand signing high dollar checks, stuffing, and mailing. For instance, in order to get out 1,000 checks per month, a company can realistically average 2 people working 2.5 hours a week or 20 hours a month. Migrating to ePayments can cut that time by 90% allowing your staff to focus on financial analysis not manual processes.

3. Virtual Card Rebate – You can earn on average greater than 1% cash back of the A/P spend that migrates to the virtual card. Typically this can be 35% of your total A/P spend. The rebate $$$ add up!

We assert that ANY organization can greatly improve their process and their efficiencies by simply changing the way they issue their vendor payments.

ROI CALCULATOR - Calculate YOUR ROI with an ePayment Conversion

Use this sheet to calculate the potential impact of converting check payments to electronic payments. Instructions: Fill in the yellow cells to calculate the impact on your business.

NOTE: Blue cells are not editable and are averages based on past ePayment campaigns.

Total Annual AP Spend $300,000.00 Total Estimated Annual Rebate: $9,900.00

Virtual Card Adoption Rate 30%

Estimated Rebate Basis Points 110

Average Cost per Paper Check $5.00 Current Total Check Expense $7,500.00

Average Checks per Month 1500

Average Cost of ACH $0.25 Future Check Expense $4,500.00

Estimated ACH Adoption Rate 40% Future ACH Expense $150.00

Total Future Expense $4,650.00

Remaining Check Percentage 60% Estimated Cost Savings (monthly) $2,850.00

Estimated Cost Savings (annually) $34,200.00

Estimated Cost Savings Percentage 38%

Average Cost per Paper Check $5.00 Total Current Expense $7,500.00

Average Checks per Month 1500

Average Cost of ACH $0.25 Future Check Expense $2,625.00

Estimated ACH Adoption Rate 40% Future ACH Expense $150.00

Virtual Card Adoption Rate 30% Total Future Expense $2,775.00

Estimated Cost Savings $4,725.00

Estimated Cost Savings (annually) $56,700.00

Remaining Check Percentage 35% Estimated Cost Savings Percentage 63%

Estimated Cost Savings (annually) $34,200.00

Estimated Annual Rebate $9,900.00

Total Business Impact $44,100.00

Virtual Card Rebate

ACH

ACH & Virtual Card

Total Business Impact

~ One $UCCESS Story~

Recently, the Controller of a company whose average A/P spend was $1,000,000 per month shared with us his Return on Investment metrics for payment automation...specifically converting checks to electronic payments (e-payments) in Accounts Payable. •By deciding to convert to a payment automation platform, this controller made a $300,000 plus annual contribution to this organization. •With virtual card payments, he successfully experienced a 30% vendor adoption of the card application. This not only lowered his cost per transaction to zero (versus the $$$ that was spent on printing, stuffing, mailing checks), but he makes a contribution to the bottom line by earning a monthly cash rebate of $23,000! •Then the company on-boarded 40% of their remaining vendors to ACH payments, producing in a $4,000 per month savings.

Again, we assert that ANY organization can greatly improve their procure-to-pay efficiency simply by changing the way they issue their vendor payments. It's that easy. No massive capital investment in researching and finding a new procure-to-pay solution is required. Even a new ERP isn't needed. If you want measurable, attainable results in short order, consider converting to ePayments/payment automation platform.

Considering the Cloud? Ask These Questions First!

CHAPTER FOUR

Considering the Cloud?

How are you deploying your company’s technology? Are you operating on-premise software with a server in a back room? Are you using some cloud applications to address specific functions? Or are you using a hybrid of both? Most likely you are already using some sort of cloud application to operate your business or practice. And chances are even better that your customers and clients are as well. Online banking is a great example of this, as is payment automation (though you don’t have to be on the cloud to eliminate paper checks).

Remember: taking the process slowly and evaluating your company’s technology needs – not just the pace of the market – is key. There are two sets of questions to begin with – Those directed internally with management and externally to vendors. There are many checklists out there that can guide you, including these questions from Kalki Consulting and Xcentric. However, consider these questions to start: 1. What technology is currently working? Why? 2. How is your current IT environment set up? Could it use an

upgrade? 3. Are an increasing amount of staff and incoming employees

asking about cloud technology? 4. Can your workflow/employees handle the bandwidth it will

take to transfer data over to the cloud? 5. How safe is the provider’s data center? 6. What is their level of support in regards to any incidents that

may happen? 7. How much will it cost? 8. How long will the migration take? 9. Does the provider conduct an annual SOC2 audit? 10. Are they in compliance with industry standards? 11. Does the provider offer on-premise applications as well? 12. How does the provider handle a data breach? 13. Will your data be encrypted? 14. Do they have customers you can call for a reference?

Moving to the cloud doesn’t have to be a complicated process. Start with assessing your current technology resources and see where you can take the first step. And when talking with a potential provider, make sure you feel satisfied with their answers and ask for references. Do your due diligence and you will have a much better chance of a successful transition. Ready to see how easy it is to covert to the cloud for ePayments/Payment Automation?

Now See How EA$Y it is

To Convert to the Cloud

& How it Can HELP YOU