In today’s world, almost anything can be done electronically: banking, buying clothing, and even ordering take out! It seems like everyone is doing everything that they can electronically.

It makes me wonder then why many large companies with enormous staff, divisions, and revenue still choose to use paper invoicing? All that paper is labor intensive and inefficient; it only slows down the organization’s business-to-business accounts payable payments.

Human beings are creatures of habit. It often takes some persuading, question and answer sessions, opinions from family, friends, colleagues and a little bit of research for a human to make a decision that can affect them or the work they do.

People in some innovative companies have accepted change and use change as a competitive advantage. Technologies like discount management and supply chain finance have created lower DPOs, DSOs and lower unit costs for these companies by automating the payment exchange process, related documents and…

In the two years since we first did an in depth study of Credit and Collection Technology, I have been extremely impressed by the strides the vendors have made in filling out their solutions. B2B credit and collections is a much more complicated process than most people think, and I am including C-level executives in that assessment. With multiple points of interaction between buyer and vendor, any number of things can affect the order-to-cash process. Moreover, if something goes wrong it is bound to turn up during settlement - no wonder collectors sometimes feel all they ever do is clean up after the party. The point is, the Receivables and Collections Management (RCM) vendors have now gotten a very good handle on all the little details and exceptions that impact cash flow.

Two years ago, the RCM vendors were still working on filling out their…

The introduction of Mastercard’s Payment Gateway, coupled with JPMorgan/Xign’s AP Trac into the Accounts Payable and B2b world carries with it a striking promise, the promise of Buyer Initiated Payments (BIP).

In the traditional card transaction, the seller/vendor/supplier end is the initiating event that starts the payment process. In BIP, the transaction is initiated by the Buyer. Some in the industry call this Accounts Payable Purchasing Card or AP P-Card or Buyer Push Card. Let me give an extremely contrived example to illustrate the difference in a buyer initiated payment:

When you’re buying your triple Venti nonfat half-caff soy latte with 1 pump mocha, 1 pump caramel and 1 pump peppermint (if it’s the holiday season), low foam, non-fat whip, steamed milk at 185 degrees, 2 packets of Splenda (shaken, not stirred), 3 drops of half & half and an extra protective sleeve, coffee drink from Starbucks, the moment…

Have you noticed that the U.S. is a nation of contradictions? This country came up with electricity, the silicon chip, the personal computer, Amazon.com, the iPod, Google, and reality TV (OK, so that’s a bad example). We have very active capital markets. We launch businesses and have active venture capital to fund them. We have entrepreneurs everywhere.

And yet when it comes to financial transactions, we are in the dark ages. Take, for example, the use of debit cards. They are just starting to be prominent in the U.S. But I’ve spent a fair amount of time in Europe, and the dominance of debit cards and “smart cards” that keep account details on the card and ensure authentication - they’re everywhere! In fact, they were everywhere 5 years ago.

For B2B transactions, well, the situation is even worse than with B2C transactions. …

Editor’s note | The following article was submitted to us by Abe WalkingBear, and can be viewed in full here. It comes from our previous discussion on Buyer Initiated Payments.

Phoenix, AZ:

It happened again.

Following my delivery of an after lunch presentation titled “What Top Business Managers Don’t Know About Credit and How It Hurts Their Company” several people approached me and said that they had planned to eat and then skip out on my presentation, but they were sure glad they hadn’t.

This group of distribution and manufacturing executives were no different than many other top business managers who still equate Credit with accounting and with risk management.

They learned a different way…and went away with their thinking changed.

In his book, The Structure of Scientific Revolutions, first published in 1962..Thomas Kuhn defines a paradigm as an accepted set of givens which provide a model problem and a successful solution…

Until recently, automation efforts in the accounts payable area were focused on invoice and payment management and the operational benefits that technology delivers – cost containment and productivity enhancement. However, all this is changing. Innovative financial managers are now recognizing AP automation as an area that offers significant strategic benefits as well - the ability to accelerate invoice processing to enhance discount capture, strengthen working capital positions and build stronger trading partner relationships.

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Over the years, Web invoicing solutions have emerged to facilitate external exchange of transaction-related information and funds between buyers and suppliers. On the other hand, front-end imaging and workflow solutions have evolved to meet organizations’ internal needs around invoice receipt and management. But Web invoicing and front-end imaging solutions both have the same ultimate goal - eliminate paper from transactions. They simply have evolved from different starting points.

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It seems fitting that the first post to Paystream Voices is one that identifies the extraordinary importance of automation technologies. A new Paystream Advisors Report has identified an enormous amount of untapped capital stagnating in Fortune 1000 companies, that could be freed up with the implementation of Receivables and Collections Management (RCM) automation solutions. David Schmidt, a contributing author on this blog, and a senior analyst for Paystream Advisors, says that “Companies that don’t automate their financial supply chain and continue to rely on manual quote-to-cash processing will find themselves at a competitive disadvantage. RCM technology provides transformational – not incremental – productivity gains for those organizations.”

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