Treasury Management Advisor

Issue 106

Improving Treasury Management with Integrated PayablesRick S. Hollar, CTP, AAP | Vice President Treasury Management Product Consultant

Rick Hollar shares tips on how to reduce costs and improve operations.

If your business is finding it difficult to manage your payments in an easy and convenient manner, integrated payables may be the answer. This comprehensive treasury management solution can help your company streamline payments processing, with the added benefits of reducing costs and improving operations.

This solution also allows businesses to reduce the risk of fraud, provide increased cash flow and support the growth of the company.

Rick Hollar, Regions Treasury Management product consultant, explains how integrated payables work and how investing in this solution can benefit a business.

What are integrated payables?The integrated payables service allows a business to consolidate payments to vendors into a single file that is sent to the financial institution for processing. The bank then creates the payments based on your instructions.

Depending on preference, checks can be printed and mailed; or, payments can be sent to the vendors electronically by virtual card, ACH or wire, depending on which solution best meets the needs of your business and vendors.

What are the benefits of integrated payables?Integrated payables streamline the payment process by consolidating it into one step. You maintain complete control of the funds and instruct the bank when to release the payment transactions.

Integrated payables also reduce cost. Because the process is streamlined and non-scale, banks are able to process payments much less expensively than a company would be able to do internally on its own.

The process prevents fraud by allowing for:

•DualControlforfileprocessingnotificationsbothforfileandtransactionreview and approval

Rick S. Hollar, CTP, AAPRick.Hollar@regions.com

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•PositivePay,whichmatchesthechecksissuedagainstthecheckspresentedfor payment

•DebitprotectionforAutomatedClearingHousepayments.

Integrated payables also allow businesses to extend their accounts payables by scheduling payments to post on their due date or take advantage of discounts by paying early or extending payment terms.

In addition, many integrated payables solutions include an online web portal for vendors, allowing them to view payment and remittance details for virtual card and ACH payments. Typically, vendors will receive an email notification when a payment is made, and the self-service Web portal gives vendors immediate access to view how much they are being paid and what they are being paid for. Vendors can usually also view archived (historical) transactions through this secure portal. This feature can improve vendor relationships by reducing vendor payment inquiries and disputes by providing easy access to this information.

What are the challenges of integrated payables?Many banks will specify exactly what file format is required, placing the burden on the business to align its systems with those in place at the bank.

However, Regions Bank takes a different approach. Instead of requiring clients to align with our existing systems, we ask them to provide the payment output file in the same format as in their accounts payable system. We then customize our programming to fit their needs, reducing the time commitment and IT requirements on their side.

Clients have two options to provide us with payment instruction files, either by accessing a secure website and uploading the file or by securely transmitting it to the bank.

What kinds of businesses can benefit most from this solution?Businesses that benefit from using multiple payment types are excellent candidates for integrated payables. In addition, those that are considering moving from paper payments to electronic, such as virtual cards, should consider integrated payables.

As part of our integrated payables service, we can analyze your vendors to see how many of your payees process Visa. With that information, we can communicate to you the number of vendors that utilize virtual cards to access possible incentives, such as rebate programs, that are available.

This creates the opportunity for a better transaction process for both you and the vendor because you are using a preferred method of payment that is beneficial for both parties.

How can integrated payables provide increased cash flow to businesses?Integrated payables better manage the accounts payable process by leveraging automation to reduce payment processing turnaround, placing your company in a better position to take advantage of supplier discounts.

Integrated payables solutions can also eliminate the need to share sensitive bank account information with suppliers reducing exposure to potential fraud. Many astute businesses are changing their payment process from check to virtual card to take advantage of these payment discounts and to benefit from an extended Days Payable Outstanding (DPO) to improve working capital management.

integrated receivablesA Working Capital Complement to Integrated Payables

Toward greater efficiency and compliance with integrated systems

Treasury management continues to migrate to ever more streamlined operations and systems, technology provides improved efficiencies and greater control over working capital and compliance. Toward this trend, have you considered integrated receivables to help manage the receipt, methods and timeliness of your payments?

Regions Integrated Receivables is a comprehensive integrated receivables solution that simplifies and optimizes the receivables process and provides faster access to working capital. Regions integrates your incoming payments so that you can receive all your wire transfers, ACH credits and lockbox payments in a consolidated data file. Integrated receivables helps expedite payment posting by allowing data specific to the transaction to be added and downloaded in a daily receivable file. Plus, also benefit from an integrated long term archive to facilitate research and issue resolution, as well as user audit functionality for added security.

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Regions provides a practical plan to migrate your accounts payable disbursements to electronic payments with the integrated payments service.

How can integrated payables contribute to the growth of a business?One of the biggest concerns I hear is that a business is growing but it doesn’t want to hire more people. The integrated payables service is a way for businesses to manage the payables process without having to increase its expenses by hiring more people. It eliminates many of the internal processes by outsourcing payables, allowing management to focus attention on growing the business, not on paying the bills.

want to learn more?Contact your Treasury Management Officer or Relationship Manager today.