Safer Accounts Payable Payment Solutions for Your Clients

What if you could help a client reduce payment fraud, simplify accounts payable, and potentially turn some of their outgoing payments into an additional source of revenue?

In this episode, I talk with Max Almerico, Vice President of Enterprise Sales for ConnexPay, about how businesses can improve the way they pay suppliers and how CPAs and bookkeepers can recognize clients who may benefit from a different approach to accounts payable.

We discuss check fraud, vendor payment verification, reconciliation, electronic payments, rebates, and the characteristics of businesses that are often the best fit for this type of payment solution.

If you work with businesses that still send a significant number of checks or have substantial accounts payable, this is a conversation worth hearing.

Reducing the Risk That Comes With Business Payments

Checks are still common in many businesses, particularly companies making a large number of supplier payments. Unfortunately, every check that leaves the business can also create another opportunity for fraud.

Max explains that ConnexPay’s payment platform can take over much of that process. Vendors can be enrolled, payments can be made electronically when possible, and payment and remittance information can be returned in a format that makes reconciliation easier.

There is also an important verification component. When a supplier suddenly requests a change to its payment or remittance information, that shouldn’t automatically be accepted as legitimate.

ConnexPay uses technology, historical payment information, and direct human verification to help validate those changes. As Max points out during our conversation, technology is valuable, but there are times when having one person verify information directly with another person is still critical.

Making Accounts Payable Easier to Manage

Fraud prevention isn’t the only potential benefit.

The payment process can involve vendor questions, failed payments, reissued checks, updated ACH information, missing information, and questions about whether a particular invoice or purchase order was paid.

Managing all of those exceptions takes time.

A payment platform can assume some of that administrative work while also providing payment details back to both the business and its suppliers. That can make reconciliation easier and reduce some of the back-and-forth traditionally handled by the client’s accounting or AP team.

Can Business Payments Actually Generate Revenue?

They potentially can.

When suppliers accept card payments, some payments that previously went out by check may be converted to card payments. Depending on the program, industry, supplier acceptance, and amount of eligible spending, the business may then earn a rebate on those payments.

Max says rebates can often be in the 1% or greater range, although the actual amount varies considerably based on the business and its vendors.

For a company sending millions of dollars to suppliers every year, even a percentage of that spending becoming rebate-eligible can become meaningful.

Which Clients Should CPAs and Bookkeepers Look For?

This isn’t necessarily a solution for every small business.

Max suggests looking closely at companies with significant accounts payable and businesses that still send large numbers of checks. Contractors are one example.

ConnexPay also works with businesses that both collect and distribute money, including certain marketplaces, travel and hospitality companies, ticket brokers, and other businesses acting as intermediaries.

For accounts payable specifically, Max says approximately $5 million or more in annual outgoing spend is a useful benchmark for identifying businesses where the economics of the service can begin to make sense.

That’s $5 million in payables, not $5 million in company revenue.

Another Opportunity to Add Value as an Advisor

You don’t have to become a payments expert to recognize an opportunity for your client.

If you’re reviewing a client’s financial statements or working with their bookkeeping and accounting team, you may already know whether they’re writing hundreds of checks, struggling with vendor payment issues, experiencing fraud concerns, or spending significant time managing accounts payable.

Those are situations where simply asking how the company manages supplier payments could lead to a valuable conversation.

That’s part of being an advisor. Pay attention to how your client’s business operates, identify areas creating unnecessary cost or risk, and help them evaluate better ways to handle them.

Questions CPAs and Bookkeepers May Have About Payment Solutions

How can electronic accounts payable payments reduce check fraud?

Replacing eligible checks with electronic or card-based payments reduces the number of physical checks leaving the business. Payment platforms can also add verification procedures when supplier payment information changes.

Which businesses are the best candidates for this type of payment solution?

Businesses with high accounts payable, significant check volume, or complex vendor payment processes may be good candidates. Contractors, marketplaces, hospitality and travel businesses, and other companies handling significant outgoing payments are examples discussed in this episode.

How much annual spending should a business have?

Max identifies approximately $5 million in annual outgoing spend or payables as a useful benchmark for businesses considering ConnexPay’s accounts payable solution. The appropriate level will depend on the specific business and payment mix.

Can companies earn rebates on accounts payable payments?

Potentially. When eligible suppliers accept card payments, some payments can generate rebates. Max says approximately 1% or more may be possible in some situations, although actual rebates vary based on industry, payment volume, supplier acceptance, and other factors.

How long does implementation take?

Max says a typical implementation can take approximately two to four weeks. Smaller organizations with fewer implementation requirements may move more quickly, while larger enterprises with multiple locations or more complicated systems may take longer.

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