For years, companies have been migrating from paper to electronic payments, looking to reduce costs, increase cash flow and create efficiencies.
In addition to increasing their use of the Automated Clearing House (ACH) network, many businesses have improved their purchasing and accounts payable (AP) processes by adopting commercial card programs.
For most, that's meant empowering employees by giving them plastic purchasing cards to pay for day-to-day business purchases. More recently, it's also included instituting ePayables with virtual cards.
ePayables volume multiplies the benefits
ePayables refers to a fully automated AP solution that employs a number associated with a card account — called a "virtual card" number — but no physical plastic card. Many businesses are expanding their commercial card programs to support larger-dollar ePayables transactions. Hancock Whitney's ePayables solution enables your business to leverage a more efficient payment channel and maximize your card program benefits as the volume of card spend grows.
Card payments can be an effective working capital management tool, and that benefit is compounded through ePayables. Cards enable buyers to pay their suppliers almost immediately — eliminating much of the float associated with check payments — while improving their own days payable outstanding performance. A business on 30day terms that pays with a card on day 30 can keep the cash on hand for up to 55 days due to a commercial card's float benefit.
Cards also provide rich transaction-level data, and supplier management reports help identify spending patterns with particular vendors. This added insight into transactions positions companies to negotiate better discounts on purchases.
In addition, businesses can earn rebates or rewards on card transactions based on spend. By leveraging a rebate or reward program in conjunction with higher card spend driven by ePayables, some companies have converted their AP units into profit centers.
If you are wondering if an ePayables program would be appropriate for your business, a Hancock Whitney banker can help you assess your needs, including analyzing your payables file and identifying all of your suppliers that accept card payments.
For more information, visit www.hancockwhitney.com/treasury-services or call (866) 594-2304.
