Using Integrated Payables to Improve Treasury Management

As your business scales up, you need a payment management solution that’s streamlined and efficient.

Consider this scenario: After a year of slow but steady growth, a fledgling startup applied for and received Series C funding. Then their business exploded. As the business scaled and demand increased, the two founders, who handled everything, had to manage more vendors and payments. Soon, payment processing became a challenge. Between cumbersome manual tasks, numerous steps for each payment and multiple file formats, the founders were overwhelmed.

Payment processing was holding this startup back—but it doesn’t have to. In a fast-moving digital payment landscape, businesses may benefit from integrated payables, an automated payment service that consolidates and optimizes payment processing.

“Integrated payables streamlines the payment process by eliminating the need for multiple steps and manual tasks,” says Kevin Morgan, Treasury Management Product Manager at Regions Bank in Birmingham, Alabama. “Businesses maintain complete control of the funds and the timing of payment transactions, while the system automates tedious elements of the process.”

Integrated payables can be a comprehensive, efficient and reliable way to manage all your payment processing needs. Here’s how it can serve you and your business.

What Is Integrated Payables?

Integrated payables is a service that allows a business to consolidate payments to vendors into a single stream. Using a single file format, a bank can then create customized payments based on client preference—from printed or mailed checks to many forms of virtual payments. Because processing payments internally can be complex and time-consuming, a streamlined service like integrated payables can significantly reduce costs and increase efficiency—potentially boosting your bottom line.

The logistics of integrated payables are streamlined. Through an online portal, businesses can issue and reconcile payments. The portal automates every aspect of the process, from loading payment files to adding payment instructions by accessing vendor records. The system also automates a vendor’s preferred payment method, be it ACH, virtual card or another option.

“With integrated payables, consolidating the payment process into one step means no more dependence on paper processes—and that equals less room for error and risk of fraud,” says David L. Duvall, Treasury Product Consultant at Regions Bank in Birmingham.

What Are the Benefits of Integrated Payables?

For businesses considering the transition from manual payments to an automated system, one concern may be a loss of control. With integrated payables, business owners still determine when banks can release the payment transactions, allowing them to maintain complete control over their funds while saving them valuable time that could be redirected toward growing their business. Even electronic payment methods, such as virtual cards, should consider integrated payables.

Integrated payables offer considerable benefits:

  1. Increased cash flow. An automated payables service reduces payment processing turnaround, placing your company in a better position to take advantage of supplier discounts. Many astute businesses are changing their payment process from check to virtual card to take advantage of payment discounts and dynamic discounting and reap the benefits of an extended days payable outstanding, which improves working capital management.
  2. Greater transparency. An online portal can give you greater clarity and insight into your transactions. Integrated payables services can analyze a company’s vendors to see how many payees process using Visa, for example. With that information, the bank can determine the number of vendors utilizing virtual cards, allowing you to access available incentives like rebate programs. The result? Using a preferred method of payment benefits both parties for a cleaner, more streamlined transaction process.
  3. Reduced risk of fraud. Automation increases accountability thanks to a digital trail. The integrated payables service includes dual control for transaction review, which makes sure that two members of a business’s team approve. The system also offers positive pay, which matches the checks issued against checks presented for payment, and debit protection for ACH payments offers further protection. With these safeguards in place, business owners can feel confident about all types of payment transactions.
  4. Simplified technology. When sending or receiving vendor payments, many banks will require companies to provide a specific file format, placing the burden on the business to align its systems with the bank’s.

“In the past, payment operations often required different payment files, and in some cases, different systems, for each vendor,” Morgan explains. “With Regions’ integrated payables, once companies provide a payment output file, the system can customize our programming to fit their needs, reducing the time commitment and IT requirements on the vendor side.”

Seamless Transition, Speedy Onboarding

For busy entrepreneurs, an integrated payables solution offers greater benefits than hiring a third party and for significantly less than an internal hire. For businesses currently using multiple payment methods or considering moving from paper payments to electronic payment methods, integrated payables can offer an efficient and seamless transition as they migrate their accounts payable.

“As businesses scale up, integrated payables allow them to manage the payables process without having to increase expenses by adding new hires,” Duvall says. “By outsourcing payables, they can also eliminate many of the time-consuming internal processes, freeing up existing employees to focus their attention on what they do best: growing the business.”

Three Things to Do

  1. Review the integrated payables offerings from Regions.
  2. Learn more about your working capital optimization cycle.
  3. Read about ways your business can streamline T&E expense tracking.