Centralizing Your Automated Payments

Centralizing Your Automated Payments Program
AMERICAN EXPRESS WHITEPAPERS
A report prepared by Global Corporate Payments

Centralizing Your Automated Payments Program
is published by American Express.
Additional information can be found at:
http://business.americanexpress.com/us/payment-services
is report was prepared by Federated Media in collaboration with American Express.
e report was written by Michelle Goodman and edited by Michelle Rafter.
Copyright ©2013 American Express, which is solely responsible for its content.
All rights reserved. No part of this report may be reproduced, stored in a retrieval system,
or transmitted in any form, by any means, without written permission.
Centralizing Your Automated Payments ProgramAMERICAN EXPRESS WHITEPAPERS
Page 2 | Global Corporate Payments | August 2013

Table of Contents
Introduction 4
Payment Challenges at Mid-sized and Large Companies 5
Benefits of Using an Automated Payments Program 6
Best Practices for Centralizing an Automated Payments Program 8
Conclusion 10
American Express Corporate Payment Programs 11
Case Study: Transplace Uses BIP for Payment Reconciliation 13
A Texas logistics provider see better control over vendor payments and daily cash flow.
Case Study: Knox Community Hospital Uses BIP to Minimize Costs 14
A 115-bed not-for-profit institution in Ohio turns to buyer initiated payments to
automate the accounts payable process.

Introduction
Companies today pay vendors using a number of
processes and payment methods across multiple financial
institutions. Many companies have yet to consolidate
payments through a single platform or with a single
provider to increase control, efficiency and transparency
of their payables.
By default, paper remains the medium of choice for 50
percent of outgoing payments and 77 percent of incom-
ing invoices (see Fig. 1)1, according to a 2011 report on
e-payables by Aberdeen Group2, the Boston technology
researcher. Given the many advantages of automating,
that’s a mistake. “It’s about 30 percent cheaper to process
an electronic payment than a paper-based check, and
about 25 percent faster,” says Scott Pezza, an Aberdeen
Group analyst.
Sticking with paper when electronic options abound is
“foolish,” says Jonathan Casher, a senior consultant with
the Institute of Management & Administration3, the
business management researcher. Automation doesn’t
just save companies money, says Casher, president of
Casher Associates, Inc.4, a Newton, Massachusetts,
consulting firm. “It improves control,” he says. “It elimi-
nates finance and late charges, and it improves a com-
pany’s credit rating and score. And you can usually
negotiate better deals with suppliers when they know
you have a good reputation for paying on time.”
Savvy organizations can reap substantial rewards
from automating payments. An overwhelming majority
of 116 mid-sized and larger companies in the 2011
Aberdeen e-payables study cited automation as their
top strategy for improving accounts payable processes.
In fact, 41 percent of companies polled said they had
Continued on next page
Incoming invoices that are paper-based
Outgoing payments made by traditional paper check
Fig.1– The AP Paper Chase
Paper remains prevalent in accounts payable departments of small, mid-sized and large businesses,
according to a 2011 Aberdeen Group survey.
77%
50%
PercentageDocument
Source: E-Payables 2011: Efficiency, Visibility and Collaboration in the Financial Supply Chain, Aberdeen Group, September 2011
It’s about 30 percent cheaper to process an
electronic payment than a paper-based check,
and about 25 percent faster.
Scott Pezza, analyst
Aberdeen Group
“
”
1 http://bit.ly/I5QweO
2 http://www.aberdeen.com
3 http://www.ioma.com
4 http://www.casherassociates.com

Introduction (cont.)
decreased use of checks in the previous two years, and
71 percent anticipated cutting check use even further
through 2013.
Companies can further accelerate payment automation
by consolidating payments through a single platform or
with a single provider. By reducing the number of inter-
mediaries and leveraging a web-based portal to improve
visibility of their payments, companies can formulate a
plan to reduce paper checks and invoices, while increas-
ing the use of electronic payment methods.
5 http://bit.ly/IzHs4q
Payment Challenges at Mid-sized
and Large Companies
Companies of all sizes are frustrated by manual pay-
ment procedures and cumbersome workflows. Some
of the top obstacles accounting departments face are:
■ Inefficiencies. Processing invoices involves much
more than cutting checks. It also means matching
invoices with purchase orders, entering data into
accounting programs, storing invoices, obtaining
payment approvals and fielding payment inquiries
from suppliers. Paying by check takes two to three
days more than paying by corporate card and auto-
mated clearing house (ACH) payments, according to
Aberdeen5. Time isn’t the only issue. e more man-
ual steps in the payment process and the more per-
sonnel involved, the more room for error or fraud.
■ Bloated costs. Processing a check costs $7 compared
with $4.78 to pay by ACH and $3.91 by corporate card,
according to Aberdeen. Checking and postage fees
aren’t solely to blame for the higher cost of manual
processing. Considerable man hours are required. Mis-
placed invoices, incorrectly keyed data and other mis-
takes eat up valuable time, further increasing processing
costs. Moreover, delays in the processing cycle can re-
sult in late fees and forfeited early-payment discounts.
■ Lack of controls. Earlier this year, when Aberdeen
surveyed 60 single- and multi-region companies about
their treasury management concerns, 79 percent
said they wanted to improve their ability to accurately
This report looks at:
■ Payment challenges at mid-sized and large companies
■ Benefits of using an automated payments program
■ Best practices for centralizing an automated
payments program
■ An explanation of American Express Corporate
Payment Programs
■ How one organization benefits from American Express
P-Cards and vPayment
When Aberdeen surveyed 60 single- and multi-region companies about their
treasury management concerns, 79 percent said they wanted to improve
their ability to accurately forecast cash flow.

Payment Challenges at Mid-sized
and Large Companies (cont.)
forecast cash flow6. “A lot of companies don’t have
that degree of control,” Pezza says. Handling payables
by paper makes tracking daily cash flow particularly
difficult. “Once the PO is matched to the invoice, it
just gets paid when it gets paid,” regardless of the op-
timum payment date, he says. “If you have a discount
that’s possible to capture but the next check run isn’t
for a week and that puts you past the window, you
miss out.”
6 http://bit.ly/J4n3j8
7 http://bit.ly/Jq8Duo
Benefits of Using an Automated
Payments Program
Automated payment systems help organizations kick
the paper habit, streamline procure-to-pay processes
and spend money more strategically.
Corporate cards and corporate purchasing cards, or
P-Cards, help organizations automate payments by
using one card account to pay multiple vendors. e or-
ganization pays a single monthly bill to the card issuer,
eliminating the need to cut and mail multiple monthly
checks. In many cases, it eliminates the need for pur-
chase orders altogether.
Electronic payment methods such as American
Express’ BIP and vPayment offer larger companies with
higher volume expenditures additional control over
how they make those payments. Web-based buyer initi-
ated payment (BIP) programs let organizations deposit
payments on the date of their choosing directly into
suppliers’ bank accounts. Organizations can integrate
vPayment systems with AP or procurement tools, as-
signing a unique account number to each payment and
limiting its value and date.
Automated payments programs also can help mid-sized
and large companies:
■ Increase efficiency. Automating accounts payable
more than doubles productivity, according to IOMA’s
2012 AP Automation Report7. Even if accounts
payable is paying promptly, there’s a 30- to 40-day
cycle from the day an invoice is received by a com-
pany until it is posted by accounts payable, IOMA’s
Casher says. “In an automated world, if an invoice
goes to accounts payable electronically, that time
frame can be close to zero,” he says. Astute companies
In an automated world, if an invoice goes to
accounts payable electronically, that time
frame (for payment) can be close to zero.
Jonathan Casher, senior consultant
Institute of Management & Administration
“
”
Automated payment systems help organizations kick the paper habit,
streamline procure-to-pay processes and spend money more strategically.

Payments Program (cont.)
are taking note. In Aberdeen’s 2011 study of business
attitudes toward e-payables, 62 percent of respon-
dents said demand for greater operational efficiency
was driving their focus on e-payables (see Fig. 2).
■ Drive savings. In that same Aberdeen report, 61 per-
cent of companies surveyed said they were switching
to automated payments to cut transaction costs.
Besides slashing check and postage costs and reduc-
ing manpower and errors, paying electronically helps
ensure invoices are paid on time, which reduces late
payment and financing fees. For example, using a
P-Card to pay suppliers reduces the average transac-
tion cost by as much as 60 percent, according to a
separate Aberdeen report8.
■ Improve cash management. Lack of predictable cash
flow was named by nearly one in five respondents in
Aberdeen’s e-payables survey as a leading reason to
automate. No longer bound by weekly or biweekly
check runs, companies using electronic payments can
hold onto working capital longer, take advantage of
early-payment discounts or pay early simply to im-
prove supplier relationships. “Some people might still
choose to batch payments,” Aberdeen’s Pezza says.
“But it gives you the control to make those decisions
on your own rather than having them made for you.”
■ Keep vendors and suppliers happy. Smart compa-
nies know the value of keeping business partners sat-
isfied. Nearly 200 AP departments that Aberdeen
8 http://bit.ly/IS2TOa
Stakeholder demand for improved operational efficiency
Corporate mandate to reduce overall payment transaction costs
Lack of predictability of cash flow
Growing risk of payments fraud
Compliance with Sarbanes-Oxley and other regulatory requirements
High invoice payment error rate
Fig. 2 – Pressures Driving Companies to Adopt E-Payables
Businesses of all sizes cited stakeholder demands, erratic cash flow and other reasons for switching
to automated payments, according to a 2011 Aberdeen Group survey.
Source: E-Payables 2011: Efficiency, Visibility and Collaboration in the Financial Supply Chain, Aberdeen Group, September 2011
19%
15%
11%
10%
Percentage of RespondentsPressure
62%
61%

Payments Program (cont.)
surveyed earlier this year said maintaining and im-
proving supplier relationships was a top priority, ri-
valed only by paying on time and avoiding late
payment penalties. “If you have control, you can make
the decision that, for a certain supplier critical in your
supply chain, it’s much more important to get the
funds to them” right away, Pezza says.
■ Improve payment visibility. Pinpointing how far
along an outgoing or incoming payment is in the pro-
cure-to-pay cycle is as easy as checking the online
dashboard of an automated system. Buyer initiated
payment (BIP) systems, for example, allow non-
accounting personnel, vendors or suppliers to go
online to check the status of a payment. In addition,
analytical tools give buyers a more detailed view of
where and when they’re spending, offering valuable
information they can use to negotiate better terms
with vendors and suppliers.
■ Earn financial rewards or rebates. Some automated
payment programs offer financial incentives that can
boost a company’s bottom line. Companies that sign
up for corporate card programs, for example, can
earn reward points and cash incentives on every dol-
lar spent. Corporate card users often can redeem
points for travel, entertainment and retail items, or
apply them to their card balance. P-Cards and BIP
yield financial rebates based on purchase volumes.
Best Practices for Centralizing an
Automated Payments Program
Depending on a company’s starting point, switching
to electronic payments can take weeks, months or
longer. “It’s important to focus on the process first,”
Pezza says. e more efficient and better documented
a company’s accounting processes, the easier the move
to automation will be.
To ensure a smooth transition, industry experts offer
these tips:
■ Secure an executive sponsor. Initiatives to automate
payments that are driven by a company’s CFO or
other financial executive have the best chance of suc-
ceeding. e project sponsor has to make a business
case for going paperless and quell concerns about
the transition brought up by other business units,
vendors, suppliers and consultants.
■ Involve stakeholders early. Include key players in the
transition process at the research and planning stage,
including the company controller, accounts payable
manager, purchasing and IT. Besides offering valuable
input, their understanding of the benefits of automa-
tion will help minimize any resistance to change.
Tapping outside resources early on, such as the IT
vendor managing the company’s ERP system, also
helps identify and resolve project hiccups before they
become roadblocks.

Automated Payments Program (cont.)
■ Assess current metrics. Nearly one in five organiza-
tions surveyed by Aberdeen Group said they didn’t
know how much it costs them to process an invoice 9.
But without that kind of accurate benchmark, a com-
pany can’t make a convincing business case for au-
tomation or measure the return on investment later.
To get started, solicit stakeholders to measure manual
processing costs. ese metrics, which vary by com-
pany, include bank fees and postage, as well as time
spent entering data, receiving invoices, matching
purchase orders, approving payments, correcting
mistakes, fielding supplier calls and following up on
late receivables.
■ Understand competing priorities. Choose when to
implement an e-payment initiative wisely. To avoid
competing for funding and stakeholder attention,
investigate whether other companywide changes are
in the works. If, for example, the company is due to
upgrade its ERP system in the next six months—
a project that’s bound to monopolize the IT depart-
ment’s time—an automated payments program would
have to take a back seat until the other work is done.
■ Automate payables first. Automating payments
in stages is more affordable than going paperless
overnight. Because the largest financial return lies
with paying vendors and suppliers electronically, it
makes sense to start there. Not only does writing
fewer checks reduce bank fees, it reduces the man-
power needed to issue payments. Companies can
then invest money saved in automating receivables.
Most vendors and suppliers appreciate the speed and
convenience of receiving e-payments. “en you
can say to them, ‘Now that I’ve made life easier for
you, what can we do to make life easier for me?’”
Casher says. is puts companies in a better position
to negotiate early-payment discounts, high-volume
purchasing discounts or automated receivables.
■ Approach top-tier vendors and suppliers first. Be
strategic about which vendors and suppliers you ap-
proach to accept automated payments and when.
Start with top-tier vendors and suppliers integral to
daily operations, such as a raw materials provider
that’s critical to your manufacturing process, or sup-
pliers with whom you spend the most money or have
the highest volume of transactions. Work with an au-
tomated payments provider to identify top vendors
and suppliers that already accept automated pay-
ments. An automated payments provider also can
help convince vendors and suppliers to accept e-pay-
ments and coach them through the setup process.
■ Get business partners to buy in. Inform suppliers
and vendors of your upcoming switch. List advan-
tages they’d gain by accepting electronic payments
and create a communications strategy to promote
those benefits. Set and measure vendor enrollment
goals. If needed, enlist your payment platform
provider’s staff to supply outreach materials and other
support to help convince reluctant vendors to make
the switch. Some platform providers also can collect
Initiatives to automate payments that are driven by a company’s CFO or
other financial executive have the best chance of succeeding.
9 http://bit.ly/J9ra1I

Automated Payments Program (cont.)
and update vendors’ banking information for you.
Provide ongoing support to vendors who have joined
and continue reaching out to those who haven’t.
■ Carefully consider payment providers. Look for
a provider who can provide tightly integrated, in-
house supplier enablement teams that can help speed
migrating your vendors and suppliers to electronic
payments.
■ Find easy ways to reduce paper invoices. Convinc-
ing vendors and suppliers to switch from submitting
paper invoices to electronic ones may be a harder sell
than convincing them to accept electronic payments.
But paying partners with corporate cards or a P-Card
helps reduce incoming invoices by consolidating mul-
tiple charges into one monthly bill. For some compa-
nies, electronic reconciliation tools such as vPayment
from American Express system can help eliminate the
need for supplier invoices altogether.
Conclusion
Automated payment methods such as corporate cards,
purchasing cards, virtual cards and B2B payment plat-
forms such as PAYVE® from American Express make
AP departments more efficient. Not only do electronic
payment methods speed the procure-to-pay cycle, they
reduce processing costs, help companies avoid late
payment and financing fees and keep vendors and
suppliers satisfied.
Centralizing automation on related payment methods
also makes it easier for organizations to schedule and
track payments, giving them greater control over work-
ing capital. Finally, adopting such streamlined payment
methods means key accounting personnel have more
time to spend on higher-value activities.

American Express
Corporate Payment Programs
Automating the payment process is a proven way to
increase AP productivity and drive savings. American
Express offers a suite of automated payment systems
that help companies reduce transaction costs, gain
control over spending and hold onto cash longer. is
suite includes the American Express®Corporate Card,
American Express® Corporate Purchasing Card,
American Express® Buyer Initiated Payments (BIP)
and American Express® vPayment.
American Express Corporate Card
Corporate Cards help businesses pay and
manage expenses efficiently. Corporate Cards let
organizations:
■ Reduce the use—and cost—of cutting checks to
vendors and suppliers.
■ Pay expenditures on a 30-day billing cycle while
allowing vendors to be paid by American Express
in their preferred timeframe.
■ Set spending and cash access limits for individual
Cards.
■ Specify company, individual or shared billing and
liability for each Card issued.
■ Use one integrated online tool to view all Card spend-
ing and manage payment reconciliation.
■ Earn one Corporate Membership Rewards® point
for every eligible dollar charged on enrolled
American Express® Corporate Cards. ese points
are redeemable for gift cards, merchandise, air travel,
hotel stays and more10.
American Express
Corporate Purchasing Cards
Corporate Purchasing Cards help companies control
how, when and where employees spend money. Akin
to credit cards, but with enhanced features for busi-
nesses, Corporate P-Cards let organizations:
■ Reduce the use—and cost—of issuing purchase
orders and paper checks.
■ Optimize working capital by paying for purchases on
a 30-day billing cycle while allowing vendors to be
paid by American Express in 14 days.
■ Set spending limits by supplier, industry, commodity,
transaction or employee.
■ Issue Cards to specific individuals or departments for
use with specific suppliers.
■ Use one integrated online tool to view Card spending
and manage payment reconciliation.
■ Earn rebates on purchases charged to their P-Card.
10 Terms and Conditions for the Membership Rewards® program apply. Visit membershiprewards.com/terms
or call 1-800-AXP-EARN (297-3276) for more information. Participating partners and available rewards are
subject to change without notice.
American Express offers a suite of automated payment systems that help
companies reduce transaction costs, gain control over spending and hold
onto cash longer.

American Express
Corporate Payment Programs (cont.)
vPayment from American Express
vPayment gives companies great control over
payables by letting them limit the dollar amount and
time period for each reconciliation. Built on a com-
pany’s existing Corporate Card infrastructure, this
customizable electronic settlement tool increases pay-
ment security by assigning a unique account
number to each Card transaction. vPayment also:
■ Enhances authorization controls and improves
company compliance.
■ Reduces invoices and reduces the need to manually
key, track or reconcile data.
■ Incorporates detailed buyer data such as PO or pay-
ment numbers into each settlement.
■ Easily integrates with a company’s existing AP or pro-
curement tools.
■ Works with any merchant that accepts American
Express® Cards.
■ Requires no change to a merchant’s processes or
system.
American Express
Buyer Initiated Payment
Buyer Initiated Payments (BIP) allow organizations to
pay many invoices from multiple vendors in a single
electronic transaction. Leveraging their existing ac-
counting or enterprise resource planning (ERP) soft-
ware, organizations periodically send electronic files to
American Express instructing it which vendors to
pay when. American Express then issues electronic
payments to the appropriate vendors, along with
detailed remittance information. (See Case Study:
Transplace Uses BIP for Payment Reconciliation,
on pg.13.) BIP also:
■ Streamlines the payables process.
■ Offers organizations great control over when they
pay suppliers.
■ Optimizes working capital by extending days payable
outstanding.
■ Reduces the hassle and cost of issuing paper checks.
■ Helps increase payment security.
■ Generates annual rebates on payments made through
the BIP program based on charge volume.
PAYVE from American Express
PAYVE from American Express is a digital payment
service that centralizes processing of multiple payment
methods through a single, easy-to-use platform to
help companies streamline payment processes and
improve working capital management. rough PAYVE,
American Express combines insights, people and
technology to help you transform payments into an
opportunity to:
■ Improve working capital and cash flow management.
■ Streamline payment processes.
■ Accelerate migration from paper to e-payments.

Case Study: Transplace Uses BIP
for Payment Reconciliation
Transplace11, a Dallas, Texas, third-party logistics
provider, has seen multiple improvements to its vendor
payment process since implementing American Express
Buyer Initiated Payments (BIP) in September 2010.
e $1.2 billion company partners with more than 2,000
transportation carriers to help manufacturers and retail-
ers manage freight transportation more efficiently. By
using BIP, Transplace has better control over its vendor
payments and daily cash flow, says Steve Crowther, the
company’s executive vice president and CFO.
Before switching to BIP, Transplace paid all carrier
invoices with checks, ACH payments or cards. To
reconcile charge card accounts, the company emailed
carriers details on the invoices it wanted to pay on a
daily basis. Each carrier would run Transplace’s charge
card through their point-of-sale (POS) terminal, often
two to three days later. For Transplace, the process
usually led to a several-day delay in cash reconciliation.
BIP is changing that. Transplace now makes daily de-
posits directly into the bank accounts of the 20 carriers
in its BIP program, totaling approximately $1 million a
month. “Instead of carriers pulling the money from us,
we’re pushing the money out to them,” Crowther says.
As a result, Transplace has a clearer picture of its daily
cash flow, he says.
e new system also reduces payment errors. Before,
carriers that accepted card payments frequently expe-
rienced invoice discrepancies. Now, thanks to BIP,
“We’re no longer having differences in what they take
versus what we told them to take,” Crowther says. As
a result, Transplace’s accounts payable personnel make
considerably fewer calls to carriers to talk over pay-
ment discrepancies. “We’re probably saving about four
hours a week” in each AP staff member’s workload,
Crowther says.
Transplace’s carriers are also happier. “We probably
have tripled our enrollment from our previous pro-
gram,” Crowther says. American Express has managed
the carrier enrollment program for Transplace, saving
the company time and hassle. “It was nice that we didn’t
have to manage the campaign program,” says Crowther,
who with American Express’ help, expects to enlist
more carriers into the BIP program soon.
11 http://www.transplace.com
Instead of carriers pulling the money from us,
we’re pushing the money out to them.
Steve Crowther, executive vice president and CFO
Transplace
“ ”

Case Study: Knox Community
Hospital Uses BIP to Minimize Costs
As stewards of a community-owned, not-for-profit
organization, executives at Knox Community Hospital12
in Mount Vernon, Ohio, know that any money they
save benefits their community.
at’s why, in 2009, executives at the 115-bed facility
jumped at the chance to use American Express®
Corporate Cards for routine purchases. “ere really
wasn’t any downside,” says Danielle O’Brien, a certified
public accountant and the hospital’s controller.
e Card was an ideal payment method for vendors who
didn't require purchase orders or generate invoices for
payment like office supplies bought online, maintenance
items purchased at local home improvement centers,
and gas purchased for hospital vehicles.
For more strategic purchases that did require purchase
order and/or invoice approval prior to payment, O’Brien
arranged for the hospital to use Buyer Initiated
Payments (BIP) within PAYVE, American Express’
corporate payment service. e electronic payment
method enables organizations automate payments
to suppliers without revamping their existing procure-
ment processes. Instead, they send an electronic file
with payment instruction file to American Express,
which sends payments to each vendor’s bank account
along with detailed remittance information. BIP
reduces manual accounts payable processes, freeing
department personnel to tackle higher-value work and
minimizing opportunities for errors.
“BIP has definitely freed up my staff’s time to concen-
trate on other activities that provide more value to the
hospital,” O’Brien says. “It’s automated a great deal of
what we do.”
Many of the hospital’s vendors have begun accepting
payment through the Corporate Card or BIP. Some ap-
preciate the convenience, and many enjoy getting paid
in 15 days instead of the 30 to 45 days the hospital takes
to pay through traditional accounts payable processes.
In fiscal 2011, Knox spent roughly 10 percent of its $251
million annual revenue on supplies and capital expendi-
tures. In the 12 months ending April 30, 2012, just over
$10 million of that went through the Corporate Card or
BIP program.
12 http://www.knoxcommhosp.org
In fiscal 2011, Knox spent roughly 10 percent of its $251 million annual revenue
on supplies and capital expenditures. In the 12 months ending April 30, 2012,
just over $10 million of that went through its Procurement Card or BIP program.
BIP has definitely freed up my staff’s time
so they may concentrate on other activities
that provide more value to the hospital.
It’s automated a great deal of what we do.
Danielle O’Brien, controller
Knox Community Hospital
“
”

Case Study: Knox Community
Hospital Uses BIP to Save (cont.)
“e Card is ideal when we’re dealing with vendors that
expect payment at the point of sale,” O’Brien says. “We
really like BIP. We wish all vendors would enroll in that
program. It would allow us to automate more of our
payments.”
For Knox, using American Express electronic payment
plans reduced some of the time and money associated
with traditional, paper-check-based payables, and
earned rebates. at’s a win-win that any not-for-proﬁt
organization would happily take.

Learn how American Express Global Corporate Payments can streamline processes, increase
visibility, leverage data and help generate savings for your company. Additional information can
be found at: http://business.americanexpress.com/us/payment-services

Centralizing Your Automated Payments

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