Completing the Cycle

 
 
By Renee Boucher Ferguson  |  Posted 2002-10-07 Print this article Print
 
 
 
 
 
 
 

Developers roll out apps that expedite the invoicing-to-payment process.

The concept of automating business-to-business invoicing and payments over the Internet may be easy to grasp, but uptake of software to do it has been slow. Developers ranging from Avolent Inc. and Xign Corp. to SAP AG and PeopleSoft Inc. are rolling out software to close the electronic invoicing-to-payment loop.

The past several years have seen the introduction of many niche vendors offering software to automate B2B payments. But only about 5 percent of the companies that could take advantage of such software have done so, according to AMR Research Inc.

That could change.

Avolent, in San Francisco, is expanding its electronic payments offerings with a new strategy and enhanced products that address what the company calls Enterprise Financial Resource Management. The goal is to streamline transactions and enhance customer relationships by simplifying customer, employee and partner interactions, according to CEO Doug Roberts.

This quarter, Avolent will announce upgrades to its BizCast platform to support its new strategy. Version 5.1, expected this quarter, includes new functions for billing and payment, enabling Avolent software to electronically manage fax and paper invoices. Account management enhancements will enable the aggregation of account information. A process management enhancement will provide the ability to manage the process of approving credit memos.

An upgraded employee access area in BizCast 5.1 adds screens for managers of customer service, credit and collection, sales, and accounting. Version 5.1 also provides consolidated invoicing.

Meanwhile, electronic payments software vendor Xign, of Pleasanton, Calif., last month announced an alliance with MasterCard International Inc., of Purchase, N.Y. By integrating its Corporate Payment Solutions into Xigns Payment Services Network, MasterCard will be able to remit payment on behalf of a purchasing card customer and include the history behind the payment.

At the same time, enterprise vendors are starting to embrace the concept with their own invoicing and payment solutions. SAP, of Walldorf, Germany, began its bill presentment and payment plans last December with the acquisition of PayNet International Inc. SAP plans to announce the fruits of that acquisition next quarter with its Financial Supply Chain solution, which will, in part, automate the invoice-to-payment cycle

Separately, PeopleSoft, also of Pleasanton, this summer announced its eSettlement solution as part of its financial management, supply chain management and supplier relationship management offerings. eSettlement lets companies send and receive invoices electronically, process payments, issue alerts and notifications, and resolve settlement disputes.

The arrival of the enterprise software developers on the scene could be the push some companies are waiting for. "Enterprise vendor [software] is the lever that will cause this logjam to break," said John Hagerty, an analyst at Boston-based AMR Research. "Its the legitimization that says [electronic invoicing and payments] isnt some specialty thing. This is how you need to work."

Sprint Corp. is enabling its 20,000-plus suppliers for electronic invoicing and payment using Xigns software. While many suppliers are still using EDI (electronic data interchange) or other older electronic payment methods, the company, in Overland Park, Kan., receives about 100 suppliers electronic invoices and sends e-payments from almost 1,000 suppliers, according to Tammie Calys, director of supplier disbursements at Sprint. Sprints goal is to have 95 percent of its invoicing arriving as electronic documents; currently, its at about 91 percent, Calys said. On the payment side, the goal is to have 60 percent of its suppliers paid electronically; currently, its at about 57 percent, she said.

"When we started the year before with Xign, about 85 percent of our invoices were sent out electronically through EDI, procurement card platforms, internal system feeds and system-to-system invoices," said Calys. "We needed Xign for smaller and midtier suppliers that couldnt use other solutions. We had a gap in regard to flexibility for suppliers. The small or midrange [company] couldnt make the leap to EDI—thats a huge technical investment."

The Massachusetts Institute of Technology recently signed a contract to use Clareon Corp.s electronic payment software to electronically pay MITs thousand vendors, rather than write checks.

By electronically remitting payment to its vendors, the university expects to have a better handle on its cash flow. Its vendors can call into Clareon, of Portland, Maine, to find out their history of payments at no cost. "The security is very good; the information is all encrypted," said Paul Arsenault, assistant to the controller at MIT, in Cambridge, Mass. "And its bank-neutral. Hopefully, this well help [our vendors] receivables part—to help them apply payment a lot quicker. Hopefully, this will also cut down on phone calls from vendors."

Calys said she believes Sprint is on the leading edge of the movement to complete the cycle of electronic payment and closing. "Its starting to catch on," she said. "But the market hasnt caught up yet to where the tools are."

 
 
 
 
 
 
 
 
 
 
 

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