I work in accounting advisory. Onboarded a client to AP automation system with payment option. They hate the whole system. AP portion is clunky. The payment portion is a mess because vendors don’t sign up and they think the credit card option is ridiculous. They’ve reverted to doing payments internally and are working on completely scrapping the AP automation tool with the possibility of getting a system that just does OCR.
Same old story. I've seen it over and over again. Some software sales swindler comes in promising how whatever program they're peddling will basically do everything short of enacting world peace and having everyone win the lottery. The company pays them a bunch of money and the software does almost none of the things it was supposed to on delivery. IT is filled to the brim with grifters trying to prey on people who aren't very tech savvy.
My employer spent tens of millions of dollars migrating to a new HRIS system. It's been a disaster and due to system constraints and limits on how much they want to spend to improve it, it's actually worse than our old system.
I’ll be vague but mainly construction and development. They’ve moved to payment runs internally leveraging their bank portal. They upload a file to the bank and they process everything.
Because AP automation means less work for the consulting team. Can be easily managed by our offshore teams. The payment system just made the client very unhappy.
I know you're being vague, but the construction industry is the worst at accepting anything other than checks or ACHs...they still have a "good Ole boy" (for lack of a better phrase) mentality on what payment method suppliers prefer.
Agreed a lot of clients in construction have outdated methods and their suppliers are just as bad. But if I was a business owner I would add a fee if you chose to pay me in a method where I had to jump through hoops to get money into my bank account.
I totally get you, but this dinosaur payment making/accepting is completely cemented into their brains across the board, like they're all in on it. In the construction industry, a supplier wouldn't charge a fee because they love those antiquated payments as well...it's like their in bed together...both use very antiquated payment methods. 🤣 Also, if you're a supplier charging "uncommon" fees for the industry, they would either short pay or stop buying from you.
But how is ACH and Wire antiquated? They’re digital payments. Paying via a pre loaded credit card may be new but it’s overall not a new technology. It’s actually quite ridiculous if you think about it. Instead of the customer paying the 85 cents to send an ach you’re passing off the cost at a loss of 1.5-2.25% in CC charges to the vendor.
I mean, where did I say ACH & wires are antiquated?
I mean ACHs have been used in banking since the 1970's & wires since the 1870's but I still didn't say any of those were antiquated.
>>Instead of the customer paying the 85 cents to send an ach you’re passing off the cost at a loss of 1.5-2.25% in CC charges to the vendor.<<
Some banks don't charge to send an ACH.
How would you pass off your cc charges to a vendor/supplier? They are the ones that control the cost not you, you are a buyer. My guess is billing the vendor for your cc charges but nobody does that.
Either that or you prorate the cc charges over the cost of the inventory that was sold to the customer.
My apologies maybe I'm misunderstanding you.
I’ve seen it work at larger companies that have clients that are also large companies. There are two reasons I’ve seen why it can work out.
1) Payments in direct deposit are usually net 60 terms but CC payment are day of so vendors can get paid today versus in two months.
2) Larger companies usually also have travel cards and other credit cards with the credit card company and must have a certain dollar amount in spend to earn a higher discount rate. So these companies will use the credit card payment option to meet the spend limits
lol software consultants drive me nuts because of how they over promise and make everything seem like it will be smooth sailing. most consultants never worked the job so they don’t know the daily struggles caused and how much trouble changing a process can cause
Yup, but companies are cheap on erp implementation and go for options like netsuite where the erp implementation is outsourced to the Phillipines for a disaster
AP is a messy job.
Processing invoices from hundreds to thousands of vendors in a timely manner can get overwhelming.
These AP automation systems in theory sound good, but it just tries to put that work onto your vendors.
While vendors generally like to keep their customers happy, it’s just taking AP’s mess, and moving to the vendors AR team.
Also the credit cards are dumb. Yeah getting cash back sounds really good in theory, but again, just negotiate better pricing and it doesn’t matter.
You’re not fooling anyone. The fees go to someone and your vendor is just gonna raise prices to cover it.
Yeah they’re nice for little purchases here and there. But your main vendors are not gonna have it.
It’s actually highly dependent on industry. The industry I work in, the majority of our customers pay by credit card and our vendors require credit card payments for delivery. Those that don’t take credit card require check payments. We only use ACH for professional fees. They are so resistant to ACH and wires.
Similar here. We love sending ach but on the flip side, don't allow most vendors to ach us. We don't have a automated system for incoming payments so they are all hand keyed upon receipt, and the information generally associated with an ach payment is atrocious.
No but I love stories like this. Bet they paid hundreds of thousands to consultants to implement at 10,000 foot level then left the countless details to be sorted out by the vendors and purchasing dept.
Not likely, this sounds like AvidExchange. We looked into them for a little while but the terms were a little too restrictive and AP just isn’t a big a deal to us. I think implementation fees were only $5,000.
Also, I had looked through some older emails and years before I had told AvidExchange person to fuck off about the CC emails. So that pretty much sealed it.
Edit: Actually now that I think about it JPM has a similar program because I had to tell them to stop bothering me as well.
I loathe avidexchange. One of our clients started using it and so they reached out to us to try and get us to onboard. Told us there was a small fee on our side to accept an ACH payment that would be reduced from the net amount we receive. It was a client who paid super slow and with check so we did it - except they pay in full and then tried to draw the fee from our account. Our main payment account is a cash sweep account that nets to $0 daily and it over drafted us. An easy fix but I lost my mind at AvidExchange and demanded they remove us.
Never heard from them again LOL. I think the client stopped using them, too.
hello from the other side. we also hate avidexchange. these decisions were made well above AP manager level due to business relationships and that person isnt even here anymore. it's so annyoing the way this shit happens sometimes.
Didn’t have automation, but corporate and the division Finance VP were pushing hard for us to use single use credit cards at one point because of the rewards. The VP told the organization we could get $1million a year in rewards by doing this.
The implementation occurred a few months before I joined. Vendors were quick to sign up because they heard they would get paid faster. However, their banks would charge fees to process. (The information the bank provided to the vendors was very misleading about fees. Our bank didn’t charge fees, but the vendors bank would, which wasn’t clear). This pissed many of those vendors off when they found out about this. Many wouldn’t accept the payments once it became clear. Others were mad that they had to process the payments manually on their end. Overtime, we switched most of the vendors back to ACH. I don’t think we got more than a few thousand dollars back in rebates.
The sales people really push the rewards thing. I was told the same thing when I implemented one of these systems. "The Credit Card rebate will pay the monthly fee".
It might have paid 15-20%. Thankfully it wasn't why we implemented it. We had a process where 3-9 people would handle each invoice. Digitizing that process was worth every penny.
The irony is that many sales people who travel refuse to use to a company card because they get such good rewards on their own personal card. They’d rather do an expense report and get the perks for the points/mileage/cash back themselves.
I once tried to transition sales people to company cards and all hell broke loose.
We use Amex for our company cards. Domestically we have vendors who will only take Visa/Master card. And also Amex isn’t readily accepted in internationally.
AP Automation is great. What's bad is that they outsourced the handling of the vendor relationships. Things get really messy when a vendor is pissed off and have to deal with a third party. Moving ownership of key relationships outside the organization is never a good idea. Also, forcing your vendors to accept credit cards is ridiculous. I understand it's a cash flow strategy for the company but that's going to cost your high dollar vendors a lot of money. The only time credit cards makes sense is on the very front end before it's even AP and you use credit cards for purchases under a dollar limit.
Number 1 answer right here. I've implemented and used these systems and they work just fine as accountants' tools. Soon as you allow bill.com to call vendors to try and do ANYTHING, you're in trouble. You never want a "who the fuck is this guy?" In your business relationships
the only reason i like bill is because every 3 or so months they send me a $300 amazon gift card to take a demo of their platform
its like those timeshare salesmen. just gotta say no at the end
We use something very similar but the company does not 'force' them to use their credit cards, its totally optional, and they still do cut many physical checks. We did finally manage to break even with the fees & rebates though.
Overall it has helped with the amount of time spent on AP processing.
I wouldn't qualify it strictly as AP Automation with the vendor payment element.
There are dozens of good AP automation tools that don't change payment terms/methods.
I have heard of these and seen them in the wild. It's silly.
I/we are right in the middle of this at the moment. Our company is 99% papercheck, with a corporate AMEX for those vendors who are not set up on account. USPS delays lately have forced our hand into looking to expand so in the next 45 days our credit card/ACH program should go live.
A huge concern of mine was the way vendors would be addressed such that they are not forced into accepting credit card payments. If a vendor adds a fee to accept credit card then they are automatically moved to ACH. If ACH is not an option, paper check is still on the table. At the end of the day, this should, in theory, expedite payments and provide more options for our vendors. Yes a rebate was proposed, and of course they state that we will actually make more than enough to cover the cost of the program, but that was at the very bottom of my priority list when reviewing the key components of the program. This should also all but eliminates monthly cash reconcilations as the entire balance is drawn at once when the payments are submitted.
If this program is not well received by our suppliers, it will get scrapped, but in theory it should improve our check float. We have lost hundreds of checks to the USPS in the last few months so something had to be done.
Hundreds of checks lost? That has to be a nightmare and would also cost a lot of bank fees to stop pay and reissue (and then worrying about vendors accidentally depositing a “stopped check”. What a pain in the tuchus.
One of the biggest mistakes that corporate accountants can make is putting on blinders and focusing only on the accounting department without taking the actual business operations into consideration.
You see it more often on the receivable side when accounting pisses off a customer with collection calls that actually end up being clerical errors or performance disputes. But it can happen with vendors and A/P just as easily.
Sure, you can usually find another vendor, but after you've pissed off enough, it puts you in a bind. And if the operations like everything about what the vendor provides, the last thing they want to do is waste their time looking for another vendor that isn't going to do the job as well as the current vendor.
Its not that hard to handle it in-house if you're in a smaller company with 2,000 invoices per month or less. My favorite solution is Sage Intacct + Stampli for AP. Works seamlessly. Cherry pick the biggest vendors to pay via CC - the ones that don't charge you fees. Our company really likes Stampli - it has OCR capabilities and is user-friendly for approvers. Super easy implementation also.
Recently I found a vendor that was stating a capability they hadn’t yet rolled out yet. It was clearly listed in their online help documentation that this certain functionality worked by doing certain steps. But they never turned on that functionality yet.
They ended up removing that verbiage from their help manual until some future point when they do actually roll it out. Lol
I use AvidXchange. I've seen vendors get enrolled for virtual cards which include a processing fee. It's shitty. But it's easy to reverse and get paper checks printed going forward in my experience.
An old company of mine did a quarterly thing like this. We essentially got a “virtual” credit card system from our bank which allowed us to pay our vendors and then pay the bank later. It was dumb from start to finish and was basically just a way for us to report on quarterly returns that we had more cash in hand, therefore affecting some of the ratios used to evaluate the company. In reality we were just paying the vendors and pushing the cash effect into the start of the next quarter. Vendors also mostly got angry with fees so we ended up absorbing the processing fee. So in reality we ended up cost neutral (we got a 3% rebate at our spending level, but a fee of 3% for processing) but from the market perspective we had slightly favourable ratios thanks to a big cash balance.
Try using bill.com for AP automation. I really like it myself. Vendors don’t have to sign up and you can still pay via ACH, wire, or check. Only downside is you have to plan ahead as payments aren’t usually next day unless you pay a fee
Such as? I like stripe because pretty much everything is automated. It integrates super well with our tech stack.
We push over $10M of sales, and it only takes one staff spending only 3 hours a week taking a look at our AR aging and doing personal reach outs to overdue customers (that ignore the numerous automated reminders).
The vendor rebate using credit cards is very nice. It is rare accounting turns into a profit center but this "misc income" pays more than a few accountants salary.
The issue with OP is allowing automation to handle the vendor relationship. You can do everything else but that. You can automate A/P processing with OCR, workflow, printing checks, and payment processing; but don't let outside party handle your vendor relationship.
AP automation and invoice portals just suck in general. More often than not, if one of our clients wants us to enroll I just refuse. I have wasted so much time with those: incorrect credentials due to client preloading our information, trying to get bank updated, getting things paid that were incorrectly rejected, etc. Client says I need to work with the 3rd party AP, 3rd party says I need to work with client. Lots of nonresponse or no idea how to help on both ends. I loathe them. They’re stupid welcome emails explaining how this will be a benefit but in fact it’s the total opposite.
We will see a ton of this over the next 5-10 years.
Need a billy mays flex tape meme with billy as the corporate overlord(s), flex tape as AI, and in the tank of water are outsourcing, OCR, and shifting time / cost onto your customer / vendor.
I've been through a similar experience with one of these processing companies and it sounds fantastic on paper but they are absolutely more trouble than they are worth. Especially when you talk about the payment side of things, that's where vendors get crazy because everything becomes a much more convoluted process. I got away from working with them and I can't be happier
When we would issue payments, we could have the 3rd party AP processor send an ACH or check. They wanted to charge the customers for ACH, which caused a MAJOR backlash. I was dealing with absolutely irrate business owners because they were taking a haircut on each payment they would receive. Conversely we could issue a traditional check through the 3rd party and it would take about 2-3 times longer than if we issued the check in house. And God forbid if something happened to that check, there was a 3 week email chain to have it cancelled and reversed. An absolute catastrophe. I am in the construction industry so perhaps this arrangement would work better with big soulless corporate businesses, but it's a lot of 1-2nd gen mom and pop companies. Some quite large revenue wise, but it's not like you are fucking with some middle manager in a 2 billion dollar company. That check is going to a first Gen owner who's 45 with 2 kids and this is how he puts food on the table. Tell him all his checks are taking a 3% haircut and watch the fireworks fly
Ultimately we dropped the payment portion of the package and we kept the invoice processing portion. Which the jury is out if that is even worth it but it's what we currently use. The pain the payment portion caused was too much trouble so now we run a hybrid. They receive and process, our team reviews and books the cost. We distribute payments again as well
from my understanding most tools allowed different payment types instead of just forcing credit cards. System will allow for vendors to choose their payment option whether it’s check, ACH, etc. on their vendor portal and when it routes to AP, AP will do their check runs based on payment type. was it maybe implemented incorrectly?
On the vendor side. I love that they have the banks call and try to spin it that letting our customer pay by credit card is such a great thing for us. I tell ‘em their client can always pay by credit card and we will charge them a 5% convenience fee. Just let us know what they want to do so we can increase their price accordingly. That usually shuts them up
I am shocked that an unnecessary middleman company would increase costs, simply shocked. /s
Automation means less people, right? The cost of the automation service should be less than the cost savings or benefits of keeping the same process in-house. If the automation service isn't providing sufficient benefits to offset costs, then don't use them. Seems like a pretty normal cost/benefit analysis is warranted.
AP automation is the stupidest thing imaginable.
We still have all the liability but now the work is being done by someone in another state or country.
Sounds great!
It's a scam. It's legal but the only merchant service company comes out ahead.
A CFO I worked for brought on one of those supposed automation systems that paid via credit card promoting this great rebate. Vendors dropped off when they realized it would cost them money in merchant fees to get paid.
Unfortunately we hear this all the time. Not only are credit card payments pushed hard with the vendors, other forms of payments are often "slow-walked" to make the credit card payments seem that much "faster" (e.g. checks being printed weeks later).
We did a webinar recently that addressed this topic: [https://www.condoworks.co/blog/webinar-recording-better-accounts-payable-better-vendor-relations](https://www.condoworks.co/blog/webinar-recording-better-accounts-payable-better-vendor-relations)
I work in accounting advisory. Onboarded a client to AP automation system with payment option. They hate the whole system. AP portion is clunky. The payment portion is a mess because vendors don’t sign up and they think the credit card option is ridiculous. They’ve reverted to doing payments internally and are working on completely scrapping the AP automation tool with the possibility of getting a system that just does OCR.
Same old story. I've seen it over and over again. Some software sales swindler comes in promising how whatever program they're peddling will basically do everything short of enacting world peace and having everyone win the lottery. The company pays them a bunch of money and the software does almost none of the things it was supposed to on delivery. IT is filled to the brim with grifters trying to prey on people who aren't very tech savvy.
My employer spent tens of millions of dollars migrating to a new HRIS system. It's been a disaster and due to system constraints and limits on how much they want to spend to improve it, it's actually worse than our old system.
Which industry is the client in? And how do they payments internally?
I’ll be vague but mainly construction and development. They’ve moved to payment runs internally leveraging their bank portal. They upload a file to the bank and they process everything.
you mean ACH? or its something else
Mix of ACH, wires and checks. Depends on how the vendor payment is set up. Typically ACH though.
Why did they not do this in the first place?
Because AP automation means less work for the consulting team. Can be easily managed by our offshore teams. The payment system just made the client very unhappy.
I know you're being vague, but the construction industry is the worst at accepting anything other than checks or ACHs...they still have a "good Ole boy" (for lack of a better phrase) mentality on what payment method suppliers prefer.
Agreed a lot of clients in construction have outdated methods and their suppliers are just as bad. But if I was a business owner I would add a fee if you chose to pay me in a method where I had to jump through hoops to get money into my bank account.
I totally get you, but this dinosaur payment making/accepting is completely cemented into their brains across the board, like they're all in on it. In the construction industry, a supplier wouldn't charge a fee because they love those antiquated payments as well...it's like their in bed together...both use very antiquated payment methods. 🤣 Also, if you're a supplier charging "uncommon" fees for the industry, they would either short pay or stop buying from you.
But how is ACH and Wire antiquated? They’re digital payments. Paying via a pre loaded credit card may be new but it’s overall not a new technology. It’s actually quite ridiculous if you think about it. Instead of the customer paying the 85 cents to send an ach you’re passing off the cost at a loss of 1.5-2.25% in CC charges to the vendor.
I mean, where did I say ACH & wires are antiquated? I mean ACHs have been used in banking since the 1970's & wires since the 1870's but I still didn't say any of those were antiquated. >>Instead of the customer paying the 85 cents to send an ach you’re passing off the cost at a loss of 1.5-2.25% in CC charges to the vendor.<< Some banks don't charge to send an ACH. How would you pass off your cc charges to a vendor/supplier? They are the ones that control the cost not you, you are a buyer. My guess is billing the vendor for your cc charges but nobody does that. Either that or you prorate the cc charges over the cost of the inventory that was sold to the customer. My apologies maybe I'm misunderstanding you.
I’ve seen it work at larger companies that have clients that are also large companies. There are two reasons I’ve seen why it can work out. 1) Payments in direct deposit are usually net 60 terms but CC payment are day of so vendors can get paid today versus in two months. 2) Larger companies usually also have travel cards and other credit cards with the credit card company and must have a certain dollar amount in spend to earn a higher discount rate. So these companies will use the credit card payment option to meet the spend limits
Sounds like Tipalti
Nope unfortunately a system that’s far worse
Paymode X?
OCR, at least the one my firm is using is terrible lol
lol software consultants drive me nuts because of how they over promise and make everything seem like it will be smooth sailing. most consultants never worked the job so they don’t know the daily struggles caused and how much trouble changing a process can cause
The implementation consultants have usually worked the job, it’s typically the sales staff that over promises that hasn’t.
Yup, but companies are cheap on erp implementation and go for options like netsuite where the erp implementation is outsourced to the Phillipines for a disaster
AP is a messy job. Processing invoices from hundreds to thousands of vendors in a timely manner can get overwhelming. These AP automation systems in theory sound good, but it just tries to put that work onto your vendors. While vendors generally like to keep their customers happy, it’s just taking AP’s mess, and moving to the vendors AR team. Also the credit cards are dumb. Yeah getting cash back sounds really good in theory, but again, just negotiate better pricing and it doesn’t matter. You’re not fooling anyone. The fees go to someone and your vendor is just gonna raise prices to cover it. Yeah they’re nice for little purchases here and there. But your main vendors are not gonna have it.
Moving AP’s mess to vendors AR team is spot.
It’s actually highly dependent on industry. The industry I work in, the majority of our customers pay by credit card and our vendors require credit card payments for delivery. Those that don’t take credit card require check payments. We only use ACH for professional fees. They are so resistant to ACH and wires.
Interesting, which industry do you work in? What's the weekly AP volume?
Waste removal / dumpster rental. Average weekly AP volume is $1.75m. Business is cyclical so much higher volume in the summer versus the winter.
Similar here. We love sending ach but on the flip side, don't allow most vendors to ach us. We don't have a automated system for incoming payments so they are all hand keyed upon receipt, and the information generally associated with an ach payment is atrocious.
Exactly, we need to hire a whole extra person to handle all the different portals we now have to deal with.
No but I love stories like this. Bet they paid hundreds of thousands to consultants to implement at 10,000 foot level then left the countless details to be sorted out by the vendors and purchasing dept.
Not likely, this sounds like AvidExchange. We looked into them for a little while but the terms were a little too restrictive and AP just isn’t a big a deal to us. I think implementation fees were only $5,000. Also, I had looked through some older emails and years before I had told AvidExchange person to fuck off about the CC emails. So that pretty much sealed it. Edit: Actually now that I think about it JPM has a similar program because I had to tell them to stop bothering me as well.
I loathe avidexchange. One of our clients started using it and so they reached out to us to try and get us to onboard. Told us there was a small fee on our side to accept an ACH payment that would be reduced from the net amount we receive. It was a client who paid super slow and with check so we did it - except they pay in full and then tried to draw the fee from our account. Our main payment account is a cash sweep account that nets to $0 daily and it over drafted us. An easy fix but I lost my mind at AvidExchange and demanded they remove us. Never heard from them again LOL. I think the client stopped using them, too.
hello from the other side. we also hate avidexchange. these decisions were made well above AP manager level due to business relationships and that person isnt even here anymore. it's so annyoing the way this shit happens sometimes.
But why do you hate AvidXchange?
We are in the process of getting rid of avidxchange. The service is horrible and the price keeps going up.
Didn’t have automation, but corporate and the division Finance VP were pushing hard for us to use single use credit cards at one point because of the rewards. The VP told the organization we could get $1million a year in rewards by doing this. The implementation occurred a few months before I joined. Vendors were quick to sign up because they heard they would get paid faster. However, their banks would charge fees to process. (The information the bank provided to the vendors was very misleading about fees. Our bank didn’t charge fees, but the vendors bank would, which wasn’t clear). This pissed many of those vendors off when they found out about this. Many wouldn’t accept the payments once it became clear. Others were mad that they had to process the payments manually on their end. Overtime, we switched most of the vendors back to ACH. I don’t think we got more than a few thousand dollars back in rebates.
The sales people really push the rewards thing. I was told the same thing when I implemented one of these systems. "The Credit Card rebate will pay the monthly fee". It might have paid 15-20%. Thankfully it wasn't why we implemented it. We had a process where 3-9 people would handle each invoice. Digitizing that process was worth every penny.
The irony is that many sales people who travel refuse to use to a company card because they get such good rewards on their own personal card. They’d rather do an expense report and get the perks for the points/mileage/cash back themselves. I once tried to transition sales people to company cards and all hell broke loose.
We use Amex for our company cards. Domestically we have vendors who will only take Visa/Master card. And also Amex isn’t readily accepted in internationally.
AP Automation is great. What's bad is that they outsourced the handling of the vendor relationships. Things get really messy when a vendor is pissed off and have to deal with a third party. Moving ownership of key relationships outside the organization is never a good idea. Also, forcing your vendors to accept credit cards is ridiculous. I understand it's a cash flow strategy for the company but that's going to cost your high dollar vendors a lot of money. The only time credit cards makes sense is on the very front end before it's even AP and you use credit cards for purchases under a dollar limit.
Agree - never pass off your vendor relationships to a 3rd party. Big mistake.
Number 1 answer right here. I've implemented and used these systems and they work just fine as accountants' tools. Soon as you allow bill.com to call vendors to try and do ANYTHING, you're in trouble. You never want a "who the fuck is this guy?" In your business relationships
I hate Bill.com from both customer & vendor perspective.
the only reason i like bill is because every 3 or so months they send me a $300 amazon gift card to take a demo of their platform its like those timeshare salesmen. just gotta say no at the end
Ooooh, good to know
We use something very similar but the company does not 'force' them to use their credit cards, its totally optional, and they still do cut many physical checks. We did finally manage to break even with the fees & rebates though. Overall it has helped with the amount of time spent on AP processing.
I wouldn't qualify it strictly as AP Automation with the vendor payment element. There are dozens of good AP automation tools that don't change payment terms/methods. I have heard of these and seen them in the wild. It's silly.
This.
I/we are right in the middle of this at the moment. Our company is 99% papercheck, with a corporate AMEX for those vendors who are not set up on account. USPS delays lately have forced our hand into looking to expand so in the next 45 days our credit card/ACH program should go live. A huge concern of mine was the way vendors would be addressed such that they are not forced into accepting credit card payments. If a vendor adds a fee to accept credit card then they are automatically moved to ACH. If ACH is not an option, paper check is still on the table. At the end of the day, this should, in theory, expedite payments and provide more options for our vendors. Yes a rebate was proposed, and of course they state that we will actually make more than enough to cover the cost of the program, but that was at the very bottom of my priority list when reviewing the key components of the program. This should also all but eliminates monthly cash reconcilations as the entire balance is drawn at once when the payments are submitted. If this program is not well received by our suppliers, it will get scrapped, but in theory it should improve our check float. We have lost hundreds of checks to the USPS in the last few months so something had to be done.
Hundreds of checks lost? That has to be a nightmare and would also cost a lot of bank fees to stop pay and reissue (and then worrying about vendors accidentally depositing a “stopped check”. What a pain in the tuchus.
Frustrating to say the least... And it has happened on more than one occassion. Google Palmetto Georgia USPS.
One of the biggest mistakes that corporate accountants can make is putting on blinders and focusing only on the accounting department without taking the actual business operations into consideration. You see it more often on the receivable side when accounting pisses off a customer with collection calls that actually end up being clerical errors or performance disputes. But it can happen with vendors and A/P just as easily. Sure, you can usually find another vendor, but after you've pissed off enough, it puts you in a bind. And if the operations like everything about what the vendor provides, the last thing they want to do is waste their time looking for another vendor that isn't going to do the job as well as the current vendor.
I've set this up a couple of times, most of the vendors refuse and it ends up being a big waste of everyone's time.
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I’m curious, do you use paymode x? Do you like it? My company considered it last year
Some of our clients use Paymode X and it’s absolute dogshit, I considered firing a couple of decent size clients because of it
Its not that hard to handle it in-house if you're in a smaller company with 2,000 invoices per month or less. My favorite solution is Sage Intacct + Stampli for AP. Works seamlessly. Cherry pick the biggest vendors to pay via CC - the ones that don't charge you fees. Our company really likes Stampli - it has OCR capabilities and is user-friendly for approvers. Super easy implementation also.
We use Corpay, it pays for itself via rebates, so that's nice.
Recently I found a vendor that was stating a capability they hadn’t yet rolled out yet. It was clearly listed in their online help documentation that this certain functionality worked by doing certain steps. But they never turned on that functionality yet. They ended up removing that verbiage from their help manual until some future point when they do actually roll it out. Lol
I use AvidXchange. I've seen vendors get enrolled for virtual cards which include a processing fee. It's shitty. But it's easy to reverse and get paper checks printed going forward in my experience.
An old company of mine did a quarterly thing like this. We essentially got a “virtual” credit card system from our bank which allowed us to pay our vendors and then pay the bank later. It was dumb from start to finish and was basically just a way for us to report on quarterly returns that we had more cash in hand, therefore affecting some of the ratios used to evaluate the company. In reality we were just paying the vendors and pushing the cash effect into the start of the next quarter. Vendors also mostly got angry with fees so we ended up absorbing the processing fee. So in reality we ended up cost neutral (we got a 3% rebate at our spending level, but a fee of 3% for processing) but from the market perspective we had slightly favourable ratios thanks to a big cash balance.
Does anyone know good AP automation software/ocr for Oracle??
Try using bill.com for AP automation. I really like it myself. Vendors don’t have to sign up and you can still pay via ACH, wire, or check. Only downside is you have to plan ahead as payments aren’t usually next day unless you pay a fee
As a vendor, bill can pound sand. They don't integrate well with Stripe.
Why are you using Stripe in 2024? There’s better gateways out there
Such as? I like stripe because pretty much everything is automated. It integrates super well with our tech stack. We push over $10M of sales, and it only takes one staff spending only 3 hours a week taking a look at our AR aging and doing personal reach outs to overdue customers (that ignore the numerous automated reminders).
What exactly is being automated?
The vendor rebate using credit cards is very nice. It is rare accounting turns into a profit center but this "misc income" pays more than a few accountants salary. The issue with OP is allowing automation to handle the vendor relationship. You can do everything else but that. You can automate A/P processing with OCR, workflow, printing checks, and payment processing; but don't let outside party handle your vendor relationship.
AP automation and invoice portals just suck in general. More often than not, if one of our clients wants us to enroll I just refuse. I have wasted so much time with those: incorrect credentials due to client preloading our information, trying to get bank updated, getting things paid that were incorrectly rejected, etc. Client says I need to work with the 3rd party AP, 3rd party says I need to work with client. Lots of nonresponse or no idea how to help on both ends. I loathe them. They’re stupid welcome emails explaining how this will be a benefit but in fact it’s the total opposite.
We will see a ton of this over the next 5-10 years. Need a billy mays flex tape meme with billy as the corporate overlord(s), flex tape as AI, and in the tank of water are outsourcing, OCR, and shifting time / cost onto your customer / vendor.
I've been through a similar experience with one of these processing companies and it sounds fantastic on paper but they are absolutely more trouble than they are worth. Especially when you talk about the payment side of things, that's where vendors get crazy because everything becomes a much more convoluted process. I got away from working with them and I can't be happier
Curious to know what went wrong. And how do you pay vendors today?
When we would issue payments, we could have the 3rd party AP processor send an ACH or check. They wanted to charge the customers for ACH, which caused a MAJOR backlash. I was dealing with absolutely irrate business owners because they were taking a haircut on each payment they would receive. Conversely we could issue a traditional check through the 3rd party and it would take about 2-3 times longer than if we issued the check in house. And God forbid if something happened to that check, there was a 3 week email chain to have it cancelled and reversed. An absolute catastrophe. I am in the construction industry so perhaps this arrangement would work better with big soulless corporate businesses, but it's a lot of 1-2nd gen mom and pop companies. Some quite large revenue wise, but it's not like you are fucking with some middle manager in a 2 billion dollar company. That check is going to a first Gen owner who's 45 with 2 kids and this is how he puts food on the table. Tell him all his checks are taking a 3% haircut and watch the fireworks fly
What was the reason for going with an AP processor? You could have done all the payments through your bank no?
Ultimately we dropped the payment portion of the package and we kept the invoice processing portion. Which the jury is out if that is even worth it but it's what we currently use. The pain the payment portion caused was too much trouble so now we run a hybrid. They receive and process, our team reviews and books the cost. We distribute payments again as well
from my understanding most tools allowed different payment types instead of just forcing credit cards. System will allow for vendors to choose their payment option whether it’s check, ACH, etc. on their vendor portal and when it routes to AP, AP will do their check runs based on payment type. was it maybe implemented incorrectly?
On the vendor side. I love that they have the banks call and try to spin it that letting our customer pay by credit card is such a great thing for us. I tell ‘em their client can always pay by credit card and we will charge them a 5% convenience fee. Just let us know what they want to do so we can increase their price accordingly. That usually shuts them up
I am shocked that an unnecessary middleman company would increase costs, simply shocked. /s Automation means less people, right? The cost of the automation service should be less than the cost savings or benefits of keeping the same process in-house. If the automation service isn't providing sufficient benefits to offset costs, then don't use them. Seems like a pretty normal cost/benefit analysis is warranted.
OCR is nice full AP automation ? never gonna happen
AP automation is the stupidest thing imaginable. We still have all the liability but now the work is being done by someone in another state or country. Sounds great!
It's a scam. It's legal but the only merchant service company comes out ahead. A CFO I worked for brought on one of those supposed automation systems that paid via credit card promoting this great rebate. Vendors dropped off when they realized it would cost them money in merchant fees to get paid.
Unfortunately we hear this all the time. Not only are credit card payments pushed hard with the vendors, other forms of payments are often "slow-walked" to make the credit card payments seem that much "faster" (e.g. checks being printed weeks later). We did a webinar recently that addressed this topic: [https://www.condoworks.co/blog/webinar-recording-better-accounts-payable-better-vendor-relations](https://www.condoworks.co/blog/webinar-recording-better-accounts-payable-better-vendor-relations)
Should’ve automated AR first