Friday, 17 July 2020

Every enterprise has employees and suppliers to pay and customer payments or other receivables to manage, yet too often, processing accounts payable and receivable can be inefficient, time-consuming and ultimately costly. 

In particular, the process of issuing and sending checks can take weeks, is susceptible to fraud and is expensive. According to Visa and Aite Group’s research, the North American economy could save between $1.2 billion and $2.4 billion by moving away from paper checks to electronic payments for funds disbursements, with 90% of those savings going to payers*. 

The time and money spent processing payments and receivables is particularly burdensome during a global pandemic, when it is critical for companies to have more control of their daily cash flow, better working capital management and the ability to maintain the health of their supply chain. Nor is a reliance on cash and checks sustainable, when so many businesses have all staff working remotely and the demand for safe, contactless transactions are a top priority. 

Companies could address all of these problems and significantly improve their business operations by digitizing their payments and receivables process. Switching to automated, API-driven payments would allow them to manage both their outbound payments, either on a one-time or recurring basis, and their inbound receivables more quickly, cheaply and efficiently. 

The time and money spent processing payments and receivables is particularly burdensome during a global pandemic, when it is critical for companies to have more control of their daily cash flow, better working capital management and the ability to maintain the health of their supply chain.

Businesses could send or receive near real-time payments** onto a debit card in a matter of seconds, guaranteed transactions that provide instant settlement, versus the two to three days it takes for an ACH transaction, or the weeks it can take for a paper check to be cut and sent. 

But ultimately, API-driven payments and receivables allow companies to control their daily cash flow. Using BBVA Open Platform’s Move Money API, for example, businesses can choose to pay contractors, suppliers, employees and even customers instantly with real-time push payments to debit cards**, with an electronic or paper check or ACH transaction, whatever the situation requires. The result? More control over cash flow, enhanced working capital management and happy payees.

Integrating API-Driven Payments and Receivables

To make this a reality for many enterprises, there needs to be an easy way to integrate API-driven payments and receivables into their existing ERP systems that control their business operations. By integrating API-driven transactions directly into their accounts payable and receivable software, as well as their invoicing, payroll, claims and rebate systems, they could save valuable time, money and enhance their bottom line, even before any payment is sent. 

“[Instant payments] allow companies to have a much closer digital interaction with their customers,” says Susan French, Senior Vice President Product and Client Operations at BBVA Open Platform. “For example, a car owner can submit an insurance claim online, the adjuster pushes a button to approve it and the payment goes out immediately.” Companies would no longer have to create a file full of checks and ACH transactions to be sent and wait for their ERP system to run a batch process to generate those disbursements. 

This presents a real opportunity for third-party ERP software providers. Incorporating API-driven payments and receivables into third-party ERP software would enable businesses who use it to adapt their businesses to their new pandemic reality and it would attract new enterprise customers looking for a more flexible approach. 

Ultimately, API-driven payments and receivables are a win-win for enterprises and their software providers to reduce costs, save time, enhance working capital, secure supply chains and to attract and retain customers during a challenging time. 

If you would like more information on how you can integrate API-driven payments into your business, contact us. We’d be delighted to answer your questions. 

 

– The Open Platform Team

 

*North America insights on real-time payments, Visa and Aite Group, June 2018

** Actual fund availability depends on receiving financial institution and region.

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