AP Discount Capture




Reductions in USPS Delivery Bolsters Case for Electronic Invoice Presentment and Payment (EIPP)


At a time when many companies are struggling to regain their financial footing after the recent recession, reductions in U.S. Postal Service delivery could negatively impact the cash flow of companies that rely on paper-based invoice and payment processes. Combined with likely increases in postage costs, reductions in mail delivery bolsters the case for electronic invoice presentment and payment (EIPP), which offers greater predictability of payments, lower costs, and enhanced information management compared to paper-based processes.

Officials at the financially troubled U.S. Postal Service recently announced that they may close 250 mail-processing facilities across the country, in turn, reducing service standards for first-class mail. Currently, first-class mail is supposed to be delivered to businesses within the continental U.S. in one day to three days. Under the U.S. Postal Service's proposal, delivery timeframes would grow to two days to three days, and mailers no longer could expect next-day delivery in nearby communities.

Following the U.S. Postal Service's proposed changes next spring, about 51 percent of all first-class mail is expected to arrive in two days, with most of the remaining mail delivered in three days.

"Companies want predictability in when they will receive payments, particularly in our current economic environment. Reductions in mail delivery services will impact this predictability, making it difficult for companies to easily forecast cash cycles. This will drive more businesses to search for electronic invoicing and payment alternatives," said Direct Insite President and CEO Matthew Oakes.

By automating invoice cycles through a collaborative portal, EIPP solutions such as Direct Insite's PAYBOX® platform improve payment predictability. In an EIPP environment, once invoices are processed and approved, electronic payments are scheduled.

Making payments electronically ensures the predictability of credits (inbound to the supplier) and debits (outbound from the buyer).

Additionally, EIPP solutions accelerate cash flow, eliminate the printing and postage costs associated with paper-based billing, streamline the management of invoice disputes, allow buyers to capture more early payment discounts, and reduce the number of phone calls regarding invoice and payment status. EIPP also offers a green alternative to paper-based invoices and bill payments.

It's for these reasons that 28 percent of the Fortune 500 currently use EIPP tools, according to research from PayStream Advisors, with more than half of the hold-outs planning to adopt the technology within three years. Meantime, the volume of first-class mail has dropped 25 percent over the past five years, as a result of online bill payments and e-mail, the U.S. Postal Service reports.

About Direct Insite
Direct Insite delivers on-demand AP and AR solutions that are deployed fast, with minimal cost and operational impact, and provide significant benefits across the financial supply chain. Since it was founded in 1987, Direct Insite has built a track record in automating some of the most demanding financial environments. Today, more than 100,000 corporations use our solutions across 100 countries (representing more than 35 currencies and 17 languages). Direct Insite's PAYBOX® suite simplifies AP and AR processes such as: electronic invoice distribution/submission, purchase order submission/distribution/acknowledgement, invoice processing/validation, line-item matching, approval routing, invoice consolidation, dispute management, payment portal/processing, and reporting and analysis. For more information on Direct Insite, visit www.directinsite.com.