Adopting a fintech mindset can have massive impact within the four walls of the enterprise, streamlining and accelerating the payment process and the financial supply chain — resulting in dramatically better outcomes for both customers and suppliers.
By Nilay Banker, Founder and CEO of Inspyrus, Inc.
Digital disruption is making way for new entrants and new models in the banking and financial services arena ala “fintech,”but corporate finance departments are also catching the fintech bug to innovate and streamline the financial supply chain for better, faster outcomes that empower both vendors and suppliers.
In the past, Accounting and Finance have been overlooked when it comes to the latest business transformation innovations. But they’re finally getting credit where credit is due. Today, technology is revolutionizing the procure-to-pay process, providing the requisite velocity and transparency to support payment automation and dynamic discounting (where suppliers proactively offer early payment discounts on approved invoices awaiting payment). Forward-thinking executives are taking advantage of payment automation and dynamic discounting for fierce financial impact – tapping into a new source of cash that’s changing the finance game.
Payment automation along with dynamic discounting allows businesses to dramatically increase payment efficiencies, cash-back rewards and early pay discounts by increasing automation, reducing the labor burden on both AP and IT, and providing a much more “supplier-friendly” early-pay discounting approach. By automatically processing payments based on the scheduled pay date (since invoices were already approved during the invoicing process) and moving all supplier payments to electronic forms of payment, organizations will see a quantum leap in process efficiencies, reduced costs and increases in cash-back rewards.
In addition, by giving suppliers the ability to request early-pay discounts when they need cash and the added instant visibility of inflight invoices, enterprises can expedite processing of discounted invoices and see a marked improvement in supplier participation and cashflow. Arming the enterprise with the ability for suppliers to dynamically request early-pay discounts fundamentally changes the game, providing a win-win for both sides of the procure-to-pay value chain. Coupled with payment automation, it delivers the fastest payments for suppliers, while maximizing discount returns for customers – especially when compared to traditional legacy investment alternatives notorious for their slow time-to-value.
Payment automation and dynamic discounting are fast becoming critical tools of today’s new breed of forward-thinking CFOs who are discarding the outdated practice of sitting on cash, delaying payments and writing checks—which has proven to deliver inadequate returns and tremendous inefficiencies (in terms of process, resources and cost).
The 2017 AP & Working Capital Report by PayStream Advisors identifies the top ways organizations are optimizing working capital, leveraging new disruptive approaches to transform Accounts Payable (AP) functions from cost centers to profit centers by unlocking hidden value, unleashing new and significant revenue streams and process efficiencies. According to the study, dynamic discounting – once relegated to only to the most sophisticated best-in-class finance organizations – continues to expand its sphere of adoption due to the provocative business case and the number of organizations saving millions of dollars, by implementing dynamic discounting as a discipline.
Payment automation is also increasing the value AP departments bring to the organization. According to The State of ePayables 2018: The Future of AP is Now report by Ardent Partners, “… tasks such as invoice matching, supplier inquiries cutting paper checks, and any manual- or paper-led processes within invoice and payment management, erode the potential value of AP by reducing the amount of staff time available for more strategic activities.”
Organizations leveraging payment automation and dynamic discounting are surging ahead of their peers by making early-pay discounts a real and significant source of cash—capturing $5 per payment in benefits and up to 2% of corporate spend directly back the bottom line and optimizing cash management in real-time. As a result, CFOs of these organizations are blazing a trail for the “new normal” in corporate finance where the accounting department is now a profit center.
According to the Bavelos Group, a consulting firm that advises companies on ways to improve working capital, “leading companies are rapidly finding that early payment discounts are an attractive option for treasury to invest cash at double-digit, risk-free returns. A 2% discount for a 20 days cash acceleration is a 36% annualized return. And while not all suppliers offer this level of savings, over 50% of early payment discounts yield better than a 30% return.”
By paying early and creating a supplier friendly and flexible environment, CFOs are transforming AP functions from cost centers to profit centers by unlocking the value trapped inside payables – and supplier relationships. To maximize the potential of this paradigm shift, organizations need speed, visibility and agility. Payment automation and dynamic discounting needs to be coupled with next-gen invoice automation and supplier enablement to ensure that the procure to pay process is a high-performance, well-oiled machine; this enables enterprises to quickly capitalize on cash-back rewards and every early-pay discount available, properly nurture their supplier networks and substantially reduce invoice processing and payment costs.
To realize this new finance nirvana, it’s critical to take a holistic and optimized approach where these capabilities along with invoice automation and supplier enablement are combined and deeply integrated into the ERP system into a single, unified solution—known as the AP Automation Platform. Anything less creates undue complexity, risk and lackluster improvements that ultimately undermines automation and business performance goals. The industry is rife with examples of failed or underperforming projects due to fragile, piece-meal integrations of disparate solutions. The AP Automation Platform delivers a truly innovative approach that maximizes the value and performance across the entire AP invoicing process and value chain – delivering new and compelling levels of automation and sources of cash.
Other key enablers of this transformation are cloud and mobile technologies. Together, these technologies dramatically accelerate time-to-value and enable processing work and approvals to be done anytime, anywhere and via any device — eliminating traditional processing bottlenecks and enabling Finance to securely bring other key stakeholders – suppliers – directly into the payment process. Providing a supplier portal provides the self-serve means for suppliers to easily check the status of payments, see purchase orders for all their sites, quickly flip POs into invoices — and most importantly, easily request early-pay discounts. Bringing suppliers directly into the process enables suppliers to create invoices that are validated and exception-free from the get-go. And by creating valuable frictionless experiences for suppliers, companies can see a tremendous boost in supplier adoption to drive an equally impressive increase in early-pay discounts and new process efficiencies.
Adopting a fintech mindset can have massive impact within the four walls of the enterprise, streamlining and accelerating the payment process— resulting in dramatically better outcomes for both customers and suppliers. The revolution in enterprise payment operations is charging full steam ahead. Success favors the bold in today’s forward-thinking finance organization, where incremental thinking is being left behind in favor of real innovation and value creation.
About the Author
Nilay Banker is the Founder and CEO of Inspyrus. He is a Stanford Computer Scientist with over 23 years of experience with cutting edge technologies and successfully delivering business software products for Fortune 500 companies. Previously, as Director of Product Development—Oracle Fusion Middleware and WebCenter, he was instrumental in developing strategies and roadmaps for several products in addition to taking these products to market.
Dollar pauses its decline on fresh virus worries
By Hideyuki Sano
TOKYO (Reuters) – The U.S. dollar stabilised on Monday after a recent decline as fresh worries about the coronavirus and the global economy prompted investors to hang on to the safe-haven currency.
But analysts said the dollar could resume its fall if the U.S. Federal Reserve reaffirms its commitment to a highly accommodative monetary policy at its rate meeting later this week — as widely expected.
“I don’t think the Fed has any incentives to curtail its stimulus at this point, even though some market players may try to read between the lines for any signs of tapering in stimulus,” said Kazushige Kaida, head of FX sales at State Street Bank’s Tokyo Branch.
“I think the dollar is staying in a downtrend even though it is marking time for now,” he said.
Federal Reserve Chair Jerome Powell is expected to signal he has no plan to wind back the Fed’s massive stimulus any time soon when the central bank concludes its policy review on Wednesday.
The dollar index stood at 90.172, flat on the day. It bounced back on Friday after hitting 90.043 on Thursday, last week’s lowest level.
Economic activity in the euro zone shrank markedly in January as stringent lockdowns to contain the COVID-19 pandemic hit the bloc’s dominant service industry hard while UK data showed British retailers struggled to recover in December.
British Prime Minister Boris Johnson also said on Friday there was evidence a new variant of COVID-19 discovered late last year could be associated with higher mortality, while problems in some vaccine roll-outs also weighed on sentiment.
Downbeat coronavirus news overshadowed some upbeat U.S. data, including a surge in manufacturing and an unexpected jump in existing home sales.
Bets against the dollar have become overcrowded, analysts also said, with U.S. data on Friday showing net dollar short positions swelling to the largest since May 2011.
The euro was little changed at $1.2174 , taking a pause after a 0.8% gain last week.
The common currency is capped in part by signs of political instability in Rome, which has also driven Italian bond yields higher. The yield spread between Italian and German bonds hit its highest since November on Friday.
Italy’s main ruling parties on Friday flagged snap elections as the only way out of its political impasse, if Prime Minister Giuseppe Conte fails to drum up a parliamentary majority after scraping through a confidence vote.
The situation in Italy demonstrates the widespread risks of political instability from popular discontent as communities grow weary of the pandemic, some analysts said.
“The stock markets’ rally during this pandemic is completely dependent on fiscal expansion and debt monetisation by central banks,” said Makoto Noji, chief currency strategist at SMBC Nikko Securities. “Political instability could delay fiscal measures. The year 2021 will not be the same as 2020.”
In Washington, the honeymoon after Joe Biden’s inauguration as President last week means investors are hopeful that at least a part of his $1.9 trillion coronavirus relief plan will come through fairly soon.
The second impeachment trial of former U.S. President Donald Trump expected early next month could complicate his efforts.
Elsewhere, the British pound held firm at $1.3684, not far off a 2-1/2-year high of $1.3745 touched on Thursday thanks in part to Britain’s lead in COVID-19 vaccinations.
Against the yen, the dollar was flat at 103.76 yen.
(Reporting by Hideyuki Sano; Editing by Sam Holmes and Ana Nicolaci da Costa)
Asian shares rise as U.S. stimulus plans offset virus woes
By Swati Pandey
SYDNEY (Reuters) – Asian shares rose on Monday as concerns over rising COVID-19 cases and delays in vaccine supplies were eclipsed by expectations of a $1.9 trillion fiscal stimulus plan to help revive the U.S. economy.
Global equity markets have scaled record highs in recent days on bets COVID vaccines will start to reduce the inflection rates worldwide and on a stronger U.S. economic recovery under President Joe Biden.
Still, investors are also wary about towering valuations amid questions over the efficiency of the vaccines in curbing the pandemic and as U.S.lawmakers continue to debate a coronavirus aid package.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose slightly to 721.96 and just a short distance away from last week’s record high of 727.31.
The benchmark is up 8.5% so far in January, on track for its fourth straight monthly rise.
Japan’s Nikkei rebounded from falls in early trading to be up 0.36%.
Australian shares were slightly higher too after the country’s drug regulator approved the Pfizer/BioNTech COVID-19 vaccine with authorities saying a phased rollout will begin late next month.
Chinese shares rose, with the blue-chip CSI300 index up 0.6%.
“The spotlight will be on Washington DC this week,” said Stephen Innes, Chief Global Markets Strategist at Axi.
The Biden administration tried to head off Republican concerns that their $1.9 trillion pandemic relief proposal was too expensive with lawmakers from both parties saying they had agreed that getting the COVID-19 vaccine to Americans should be a priority.
Financial markets have been eyeing a massive U.S. economic stimulus though disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.
“Vaccine breakthroughs make it likely that life will become more functional again at some point in 2021, resulting in higher GDP growth and more robust corporate earnings,” Innes said.
“But increasing global COVID19 infections, new variants of the virus, tightening social distancing restrictions and delays in vaccine rollouts in some places, all increase the near-term growth risks.”
Global COVID-19 cases are inching towards 100 million with more than 2 million dead.
Hong Kong locked down an area of the Kowloon peninsula on Saturday, the first such measure the city has taken since the pandemic began.
Reports the new UK COVID variant was not only highly infectious but perhaps more deadly than the original strain also added to worries.
In the European Union, political leaders expressed widespread dismay over a hold-up by AstraZeneca and Pfizer Inc in delivering promised doses, with Italy’s prime minister lashing out at the vaccine suppliers, saying delays amounted to a serious breach of contractual obligations.
On Friday, the Dow fell 0.57%, the S&P 500 lost 0.30% and the Nasdaq added 0.09%. The three main U.S. indexes closed higher for the week, with the Nasdaq up over 4%.
Jefferies analysts said U.S. stock markets looked overvalued though they still remained bullish.
“For the stock market to have a real nasty unwind, rather than just a bull market correction, there needs to be a catalyst,” analyst Christopher Wood said.
“That means either an economic downturn or a material tightening in Fed policy,” Wood said, adding neither was likely to occur in a hurry.
In currencies, major pairs were trapped in a tight range as markets awaited a U.S. Federal Reserve meeting on Wednesday.
The dollar index was flat at 90.19, with the euro at $1.2169, while sterling was last trading at $1.3691.
The Japanese yen was unchanged at 103.77 per dollar.
In commodities, oil prices fell with Brent down 12 cents at $55.29 a barrel and U.S. crude off 3 cents at $52.24.
Gold was higher with spot prices up 0.2% at 1,855.9 an ounce.
(Editing by Sam Holmes & Shri Navaratnam)
U.S. inauguration turns poet Amanda Gorman into best seller
WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.
Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped Amazon.com’s sales list.
“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.
Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.
While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.
“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”
Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.
“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.
“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”
The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.
“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.
A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.
She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.
Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.
“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.
Gorman’s books are both due out in September.
Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.
(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
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