What if Your Automated Electronic Invoice Presentment and Payment (EIPP) Process was Really Automated?
For years, we’ve heard about the promise of paperless business-to-business (B2B) transactions. In reality, nearly 90 percent of all businesses still make B2B payments with paper checks sent through the mail. The problem with most Electronic Invoice Presentment and Payment (EIPP) solutions is that they do not handle the actual transfer of funds between businesses. But something new is happening in accounts payable automation that will transform how you make payments and manage your money.
The promise of automated procurement and accounts payable is so enticing that many of the largest enterprises have invested heavily in expensive Electronic Data Interchange (EDI) systems that directly connect large buyers and their banks to their large suppliers and their banks.
For companies that are unable or unwilling to make costly capital investments in an enterprise EDI solution, EIPP software offers an alternative solution that can be cost-effective, highly functional and secure.
EIPP solutions have been available for many years now and today there are over 150 EIPP vendors in the marketplace. Adoption of EIPP has been robust over the last several years, with the market growing at a 26 percent annual rate since 2004. Some businesses are just dipping their toes into the EIPP pool, but many others have taken the EIPP plunge.
So how is EIPP actually doing on streamlining accounts payable and the purchase-to-payment cycle? The uncomfortable reality in today’s world of accounts payable: Excluding the largest enterprises, nearly 90 percent of all B2B payments are still made with paper checks stuffed into envelopes and sent through the mail.
If you are using EIPP right now, perhaps you think of the actual payment part as a separate component of the payable process handled internally or by your check-writing service. Indeed, many industry analysts and EIPP vendors themselves do not consider the transfer of funds as part of EIPP.
Consequently, what should be a fully automated process is still largely handled manually, and at great cost. That, however, is about to change. Why, after so many years of being promised paperless B2B transactions, is it really going to happen this time? We’ll discuss this in detail later, but first you need to understand why it hasn’t happened yet.
The answer has everything to do with the second “P” in EIPP: Payment.