Here’s a best practice for your Accounts Payable department
(That you’re probably not doing.)
Here’s a question for all Accounts Payable (AP) managers and treasury professionals: How often do you think about payments after you’ve made them?
You may occasionally revisit old payments when an exception happens, or you must answer a payment question for a vendor. But are you going back to analyze your business’ AP spending from last month? Last quarter? Last year?
You might be thinking, “My team doesn’t have enough time to do that.” The fact is, analyzing your company’s AP spend is the best way to find out where you can save time, money and where you can earn new revenue. New revenue! From the AP department!
In general, AP departments have been largely overlooked for new technology investments in favor of other business needs. But after decades of neglect, they are now filled with untapped potential for new savings and revenue. For example, you may not realize how expensive checks are.
If the majority of your company’s payments are still done by check, you’re paying a lot more than the amount on the invoice due to the cost of ink, stamps, paper, printing equipment and the employee time spent signing and managing checks.
The fastest way to find out your missed potential
A simple way to find your potential savings and revenue quickly is by getting what’s called a Spend Analysis. A Spend Analysis provides in-depth data about your AP spending patterns. It can identify strengths and weaknesses in your payments and can even show you how to create new revenue in your AP department.
A Spend Analysis may look at your 12-month spend file to determine how many suppliers you are paying and how many payments you’ve made. It can:
- Show your current “payment mix,” or which payment methods (check, ACH, card, wire, etc.) make up your AP payments.
- Provide projections on what your payment mix can be – highlighting revenue-generating payment types you should be using.
- Identify what additional revenue you’re missing by not paying your card-accepting suppliers with a virtual credit card.
Getting a Spend Analysis is easy
You should be able to reach out to your bank or AP provider (if you have one) to help you determine how your payment strategy is performing.
If you do not have a partner resource to help you, or if you are looking for a fresh perspective on your AP department, Commerce Bank is happy to walk you through the process.
A Spend Analysis by our team is free. Not only does it include an easy-to-read report about your company’s AP spend, we will personally walk you through the data to ensure you understand what it means and how to capitalize on it.
It’s more than just a report
If, after you receive your Spend Analysis, you decide to work with Commerce Bank further, our vendor enrollment team will ensure that your final AP solution meets (if not exceeds) the projections made in your Spend Analysis.
Our team of enrollers reach out to your suppliers individually to coordinate new, revenue-generating payment methods on your behalf. They continue to do this indefinitely throughout the life of your AP program with Commerce Bank—anytime you change or gain a new supplier, Commerce Bank calls. This ensures that your AP program remains as effective as it is on day one. (In fact, many AP customers see improved metrics years down the road.)
Commerce Bank also provides ongoing support for your suppliers, so you can offload your exception-handling duties and payment support calls from your vendors to our team, while your AP department focuses on other priorities.
We’ve been helping businesses develop additional revenue streams for years, and during this time of uncertainty, it’s imperative that your business is taking advantage of new sources of revenue that impact your bottom line for the better.
Commerce Bank can help you identify potential savings and revenue quickly with our free Spend Analysis service, and we’ll go above and beyond to make sure your new AP program exceeds your expectations. Gather your AP spending data from the past 12 months and give us a call or visit commercebank.com/payments to learn more about CommercePayments™.
Paul Stanford is a Senior Vice President and member of Commerce Bank’s Downtown Denver Commercial Banking team. Paul is focused on finding ways to help small to mid-sized Colorado companies create efficiencies, reduce costs and generate new sources of revenue. He has more than 30 years of financial services experience in commercial banking, structured finance, private banking, and treasury management. Paul is a graduate of the University of Denver and has lived in Colorado for 25 years.
(Sponsored content for this article provided by Commerce Bank)