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Expand Electronic Payment to Increase Revenues

Expand Electronic Payment to Increase Revenues . Cheryl Shanaberger, MPA, CPPO Deputy Director Office of Management and Budget City of Port St Lucie March 22, 2013. Our Purpose Today:. Discuss payment options that generate revenue

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Expand Electronic Payment to Increase Revenues

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  1. Expand Electronic Payment to Increase Revenues Cheryl Shanaberger, MPA, CPPO Deputy Director Office of Management and Budget City of Port St Lucie March 22, 2013

  2. Our Purpose Today: Discuss payment options that generate revenue Discuss strategies to implement to encourage the vendor community to accept alternate payment methods

  3. Electronic Payments • E-payables (Electronic Payables) • Payables automation • Push payments • Pull to pay • STP (Straight-through payments) • BIP (Buyer-initiated payment) • EAP (Electronic Accounts Payable) • SUA (Single-Use accounts) • EIPP (Electronic Invoice Presentment & payment)

  4. Electronic Payments • Procurement Cards • Travel Cards • Fuel Cards

  5. Electronic Payables • Payment systems: • Initiated & managed centrally within • Utilize some part of traditional P2P process • Suppliers still utilize the card network • E-Payables are about the payment process

  6. Electronic Payables(E-Payables) • Agency approves invoice • Agency Notifies provider for payment • Notification is usually an uploaded file • Most cases suppliers receive remittance information from the end-user’s provider

  7. E – Payables Supplier gets paid: • Pull model- by charging a designated card account # (can be the same or different each time); Supplier must process a charge and retain card # • Push model- (STP) a deposit into it’s merchant account; similar to an ACH payment; Supplier does not process charge

  8. Benefits • Occur faster than check payments • Provides more budget control if incorporated with an encumbrance process • Streamlines the payment process

  9. Challenges • Slower than traditional P-Card Model • Less process savings than P-Card • Less Cash flow savings • Less beneficial to supplier

  10. Benefits to end-user E-Payables & P-Card • Increase days payable outstanding • Advantage of Early payment • Eliminates need to retain suppliers’ banking information • Reduction in check payments and cost • Reduced exposure to fraud • No federal 1099 reporting • Timely reporting & tools for reconciliation • Increased spend/payment visibility

  11. Agency Challenges • Incorporate electronic payable into a payments strategy • Supplier enrollment • Internal resources • It Support • System integration issues • Proper data transmission for all parties

  12. Supplier Barriers • Cost, Cost, Cost • Concerns sharing bank account details • Fear of change • Concern of retaining card #

  13. Overcoming Supplier Barriers • Offer multiple options for invoicing & payment • Simplify & promote enrollment • Know your suppliers • What offers and incentives can your agency offer • Include in all RFP’s & Bids

  14. Think E – Payment • Profit Margin • Retainage • Mobilization • Payment Terms • Rebate sharing • Bonds • Fees are deductible by vendor • Points for Award in RFP • Rebate considered in award

  15. Questions? Ref: Bank of America Merrill Lynch, Driving automation in the payable process June 2012 Ref: NAPCP.org, Electronic Payables

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