The first day of AFP, the conference for finance and treasury professionals in Nashville, Tennessee, began with a discussion led by Mike Watercott, CTP, a working capital consultant at US Bank. He was joined by Andy Sullivan, vice president of channel sales at Bottomline, and Cynthia MacGeagh, treasury manager at Clayton Homes, to explore the balance in payments.
During the session, the panel emphasized the critical role of communication within treasury teams, the importance of understanding organizational needs, and the necessity of adapting to specific business unit requirements. They highlighted the need to focus on enhancing cash visibility, eliminating reliance on checks, and improving fraud prevention measures.
Sullivan noted that organizations are striving to improve efficiency and processes related to payments. He stressed the importance of moving away from paper checks and invoices, which are often slow, inefficient, and vulnerable to manual error and fraud. He acknowledged the progress made over the last 10 to 15 years, accelerated by the Covid-19 pandemic, which pushed organizations to automate in the face of remote work demands. However, he pointed out that there is still significant progress to be made.
With many U.S. organizations still relying heavily on checks, the panel discussed how fraud issues continue to rise. Watercott inquired about the motivations for automation, which the panel summarized into four key points: operational efficiency, risk management, enhanced visibility, and revenue opportunities.
MacGeagh shared that her business units at Clayton Homes issue approximately 10,000 checks per month. She explained the challenges associated with managing equipment, security protocols, and the overall burden it places on traditional business operations. She advocated for cheque outsourcing, integrated payables, and consolidated payables to ease this burden, noting that transitioning to a more streamlined solution doesn’t have to be an all-at-once process.
Addressing fraud concerns, MacGeagh mentioned that every organization is at risk. She pointed out that while companies previously accepted checks with a 75% name match rate, the standard has now shifted to requiring a 100% match, leading to more mismatches for treasurers. Sullivan added that this situation negatively affects operational efficiency, which is essential for financial organizations.
He concluded by highlighting the importance of managing and safeguarding sensitive vendor data to mitigate the risks of substantial fraud losses. The potential reputational damage stemming from such losses must also be taken into account. In the journey toward accounts payable automation, he emphasized that automating vendor onboarding is crucial to preventing fraudulent activities, stating that it is increasingly challenging for organizations to maintain the necessary level of vigilance.