Lauren: How to Build Better Relationships with Vendors through Electronic Payments. My name is Lauren Pinch and I am the managing editor of Construction Executive magazine, published by Associated Builders and Contractors.
I will be serving as a moderator of the presentation. Construction Executive reaches more than 50,000 contractors and construction-related business owners and has won more than 15 editorial awards. The magazine serves as a leading source for news, market developments, and business issues impacting the construction industry. Each issue includes articles designed to help owners and shop managers run a more profitable and productive construction business. In today’s webinar, you will learn how to get vendors paid faster and more accurately, how to have more control over your payables, and how to provide your team and vendors with greater visibility into payment status.
And keep in mind if you have any questions that come to mind during the presentation ahead, please type them in the chat screen at the right and we will address as many as we can in the live Q&A session at the end of this webinar. If we are not able to answer your question right away due to timing, we will send you a separate email after the webinar and answer your question that way.
Also within the next few days, avidxchange will send you an email with a link to the recording of this presentation as well as the link to download the Tech Savvy Buyer’s Guide to Payment Automation for Construction Professionals published by avidxchange. You can also download the Tech Savvy Buyer’s Guide to Payment Automation now, by clicking on the link in the handout section of your GoToWebinar panel.
Today your presenter will be Jim Campbell. He is the vice president of construction sales at avidxchange. Jim has been in the construction software industry for over 35 years in various sales management and channel development role. And over the years, Jim has witnessed many advancements in application software development for the construction and real estate industry. And he has served as a leader at various companies including Timberline Software Corporation, Sage Software and Viewpoint Construction Software. And now, I will hand it off to Jim.
Jim: Well, thank you very much Lauren and thanks for the opportunity today to share a bit about AvidXchange and some best practices in accounts payable automation. You know, in preparing for today’s webinar, I got to thinking about our 16-year history and I realized that 16 years may not be a long time to be in business compared to some of the, some of you construction companies out there that have been around much longer and perhaps even for multiple family generations. However, when it comes to accounts payable automation, this dates AvidXchange really as one of the early pioneers in bringing advanced technology for operational improvements, focused entirely upon accounts payable. And so, that’s what we really want to explore today.
We’re headquartered here in Charlotte, North Carolina, so just in case this southern accent didn’t fool you there. And we at avid are now rapidly approaching 800 employees across the United States. Currently we have about over 300,000 suppliers in our AvidPay network who are receiving payments from us on a recurring basis on behalf of some 5500 clients. I think our customer satisfaction is probably best evidenced by a 98% customer retention rate. We’re very, very proud of that accomplishment there. Our collective success with customers and vendors alike has really not gone unnoticed. We at avid believe the customer satisfaction starts with employee satisfaction and to that end we’re very proud that avidxchange has been voted among the best places to work each year of the past seven years in the Charlotte Business Journal by our employees. And again, a hit count that’s somewhere between 750 and rapidly approaching 800 across the country.
The innovative technology we provide has also not gone unrecognized. With recognitions from Deloitte Technology Fast 500 Awards and also several North Carolina Technology Awards just to name a few. The explosive growth of avidxchange is probably the best indicator I can give you today to let you know that accounts payable automation is a fast-growing market. It’s a fast-growing opportunity in the industry and a lot of companies are focusing on that for process improvement. And to that end I applaud you today for taking time out of your busy schedules to incorporate some of these insights as you prepare for your company’s growth.
Now I want to, as we get into the agenda, I want to take a moment to remind you [inaudible 00:04:55] that you got an opportunity throughout this webinar to go to your panel and input questions. We’ll try to take ‘em at the end and if time doesn’t prevail we’ll follow up in separate messaging back to you. But again, along the way I encourage you to post questions as you think of them. So, proceeding with today’s webinar, we chose to dive deeper into three primary topics.
First, how to get vendors paid faster and more accurately, more efficient, more efficiencies in the vendor payment process if you will.
Secondly, how to get more control over your payables. And lastly, how to provide your team and vendors with greater visibility into the overall payment status to help improve overall communication. Just as an aside here today, I may use the word vendor or supplier or subcontractor, I may use those terms interchangeably. And when I do, just understand that each represent a payee or a receiver of payment when I use those words somewhat interchangeably in the context of today’s presentation. Now, by examining each of these areas more closely, our goal is to [inaudible 00:06:05] you inside, not only into productivity and call savings with technology, but also improved relationships with your vendors and suppliers. There are wins here for everybody on both sides and hopefully you’ll see us today taking a more holistic approach to all of those stakeholders that are involved.
So, let’s start out with the first polling question. We’ll have a few of this throughout. These are an addition to the questions that you could submit. Lauren?
Lauren: Yes, so our first polling question is, do you have AP automation as an initiative between now and the end of 2017? And we’ll allow about one minute here and the poll is now open. Okay, the poll is in progress, we’ve got a few more people responding, questions are coming in.
All right, got about 30 more seconds here for people to respond. Do you have AP automation as an initiative between now and the end of 2017…Okay, it looks like the poll results are yes, 67%. So, that’s a decent amount, no 25% and I’m not sure is 8%. So, that means that people still have some education to have in this area.
Jim: Well, that is, that’s actually quite good, that’s a wonderful distribution and I think we’ll have something here today for all in each of those categories. You know, as I was preparing for this seminar just last week I opened my Building Profits magazine which is a magazine that’s published by CFMA, Construction Financial Managers Association, another good organization just like ours here today. And I noticed that Ken Chiccotella, who’s the current chairman with the [inaudible 00:08:20] Group, who comes from the industry had a lead article. The article was entitled, “Leveraging Technology to Improve Company Operations.” And in this opening article, I was very pleased that he called out both invoice and payment in the accounts payable world, as very deliberate areas of focus for operational efficiency gains.
And it sounds like with 67% of you would agree with that and are thinking the same way. I found this words very fitting for this presentation when he said, and I quote, “Today, in addition to old methods of processing, signing and mailing checks, other payment options are available.” Now, there’s three key words I’d like to underscore in this statement, and those three key words are perhaps not the ones that you might think, but they are in addition to. And I’d like you to keep that in mind throughout today’s presentation. You know, there’s some areas of technology require wholesale changes that had to be digested all at once. And keep that in mind as we go through today’s presentation.
Let’s talk a little bit about life before automation. And I think what you’ll see here is in this chart, and I’m not going to read it to you, but I do ask you to focus on it. I would submit to you today, almost everyone is following some type of accounts payable process and in general looks something like this. And I think each of those [inaudible 00:10:02] are pretty well identified of that.
Now the question I’d like you to ask yourself here, is what true value does each step in this process contribute to your business? What true value does each step in this process contribute to your business as you examine those?
Now, I think that a conscious examination of each of these steps will drive us to the goal of determining, what are the non-value added steps that perhaps it can be eliminated. And giving that time back to your organization to focus on what’s really important and doing the things that only you can do. With advanced payable automation, you should reasonably expect to be able to skip many of the manual steps of your current process.
And provided that you’re willing to take a fresh new look at this process and not be constrained by or shackled by the old mindset of well, that’s just the way we’ve always done it. And that can be somewhat of a constraining model. So, my hope today is to redirect your focus on the steps again that are really important, that really add value to the business and ensure accurate and secure delivery of important outcomes such as payments, nothing more important than payments.
You know, the first presentation of invoice to your business, doesn’t have to be opening the morning mail. Think about this. What if the first presentation of the invoice was a digital image received by the first individual in the approval process? Maybe that individual’s responsibility was to ensure that it’s properly coded, and the coding to the appropriate jobs, etc., are all scheduled out. And then it gets sent on its way through an intelligent work flow that you determine for the remaining steps of the approval process. This is kind of characteristically what we’ve simply called “automated approval.”
Then think about a world where the approved invoices that are ready to be released for payment, did not have to result in physically printing checks, physically signing, and stuffing checks in envelopes, supplying postage and then dropping in the mail.
But friends, I want to tell you, that world actually exists today even with more control and security than you might have in your current processes and in ways that can ensure that we’re following all of your treasury rules and personal oversight for cash disbursement. If I may, let me pause for a moment and just sort of just dispel a myth to that last point. And that kind of myth is this, in today’s world a lot of people have a natural fear that with more advanced accounts payable automation, particularly with electronic payment, they’re going to lose control. And I hope that you find soon, through your research or your firsthand experience about talking to your peers, that you’ll find that that is really an unfounded fear. That with advanced accounts payable automation controls, and particularly with electronic payment, you will have far more control than you ever did in the manual process.
And I think you’ll see that printing checks and putting ‘em in a desk drawer is no longer the solution to controlling your cash flow and that you can have a whole lot more control with electronic payments. So, this whole subject of AP and automation electronic payments, let’s step back for just a few minutes and let’s kind of take a look and a peak at what’s going on in industry with electronic payments today.
And I think as you’ll see from this chart, it’s fairly safe to say that electronic payments are very much on the rise. A recent survey here by payments.com indicates as you’ll see there if you follow the chart, pie chart, 48% of business are very likely to convert major suppliers to some form of electronic payment, and that was within the next 12 months I believe. Now, when you add that 48% to the 25% that responded “we are somewhat likely” and then add that to the 19% that say they already have. You see that 92% of electronic payments is in these business’ future.
Now, I’m been in the construction technology for a little over 37 years. Personally, I believe this is one of the areas, this whole notion of AP automation is prime for very rapid adoption. And I think your survey, the results from your poll question this morning, sort of support this thinking. This could have potential for creating another one of those remember when moments.
What do I mean by remember when moments? Well, I’ll pose a couple of question. You remember when we had to send out for blueprints, to pick up blueprints from a reprographic shop not that long ago, I’m sure many of you remember that. I’m sure many of you remember when we had to wait until we got back to the office to return an important phone call. So, this has potential of being, remember when moment too. It might go something like this, remember when we used to have to purchase preprinted checks, and then stuffed envelopes and stamp and mail ‘em, just to get an invoice paid. Rapid adoption in the construction industry, we’ve seen it before where technology makes sense and gets applied, and I think we’re gonna see it in this area if we’re not already.
And, in addition to productivity settings in advanced AP automation, there are some from a financial point of view there are some true very hard cost benefits in addition to even rebate opportunities similar to what some of you experience on your consumer bank credit card programs. Just to give you some insight, with just looking at our company data, customers on average that make about 10,000 monthly payments through the AvidPay network, see an annual cashback rebate of about $7200 a year on average from a rebate perspective.
One mid-sized company that allowed us to share this data the Wilton Companies, estimated that electronic payments alone saves them about $9000 a year simply in hard costs. And those would be the cost of checks and postage and those types of things. Not to mention the productivity gains which are the primary reason of pursing this initiative to start with. So, again rarely do you get an opportunity where there’s major productivity gains, major hard cost savings, and even in rebate opportunities all-in-one.
So, let’s look at some of the secret sauces to help this initiative move along, again taking a holistic view of all parties involved. One key to successful change management involved in any type of automation, is to make sure that all parties involved have a seat at the table and feel like they’re included. Now in that accounts payable automation we need to be very conscious that for every maker of a payment, there is a receiver of a payment that should be taken into consideration. I know that’s pretty basic, but I just want to tee that up for that mindset here for this next discussion.
While accounts payable automation, may be a revolutionary way in the way we make payments, it actually allows for a more of an evolutionary type of adoption in the way your vendors and subs and suppliers receive payment, and that’s sort of the secret sauce. And specifically, what we’re finding is that what works best and what vendors want, they really want education and choices in addition to being included in the process. Here’s, specifically, what I mean by that. Maybe a vendor’s not ready to receive an electronic payment today for a current payment that’s due now. An electronic payment can take form for example, in the form of a virtual credit card or perhaps an ACH settlement, maybe they’re not ready for that today. But that doesn’t mean that they are not ready to learn more.
So, in that case, what the electronic payment provider should do, the solution is simple, they should cut them a paper check. That’s something that they’re used to receiving and then focus on maybe some later education, not in the heat of the moment when a payment’s involved, on educating them about some of the benefits back to them on receiving payments electronically in the future and maybe giving it a try.
And offering these choices has really been our secret to success and it’s about the only accounts payable automation vendor can promise you and deliver on the promise of being able to make 100% of your commercial payments. And that is to give the vendors choice, let them have input as to whether they want to receive a credit card payment, perhaps receive an ACH or just hit the point, that they want to continue to receive a manual check. Hopefully that makes sense, and again I’ll remind you any questions about that now is a good time to submit those questions into Lauren. And, in fact, Lauren, I think it’s time actually for another polling question.
Lauren: Yes, thank you, Jim. So, another question here for our audience. Are you using electronic payments today for your construction company? Yes, no, or I’m not sure, and we’ll let that poll run for just a little bit here with folks still responding. Again, if you missed the question it is, are you using electronic payments today for your construction company? Just a couple more seconds…Okay, and the poll results are in. And, we have 55% saying yes, 27% saying no and 18% again saying I’m not sure.
Jim: All right, very good and again that’s good data. It helps me kind of orient these next comments. And again, I think there’s something here for everyone, particularly on this very next slide as we dig into deeper, about having more control over your accounts payable. So, interesting, over half of you are making some form of electronic payments today, that’s very good to hear. Let’s talk a little bit about some of that control and maybe tie that in to both electronic payments and routing an approval. Let’s start with invoice routing.
You know, electronic invoice routing and approval systems really allow you to establish your own work flow with your rules on what happens next, based on your criteria. Now, that just means that essentially, you’re in control and these work flows can be very intelligent, they can be based on your rules and they can meet with different outcomes based on different conditions and tolerances that you set. But overall you quickly and efficiently you know, get those invoices into the hands of the people that need to see ‘em.
And then based on their role, they contribute appropriate information towards the approval process. So, a good way to look at this is just think in terms of building value towards approval in every step along the way. Did we receive the goods that were invoiced? If we ordered 12, did we get 12? Was the material damaged? Were the costs in line with the purchase order the gross cost and unit costs or those types of things. And everyone in staff should, again, be adding value towards the approval process. With automated invoice routing and approval, you know, you can still think of taking these two broad areas.
Number one is operationally approved for payment, meaning did all the people that are involved, or project manager or superintendent, a receiver of some sort, did they get to weigh in on whether that invoice has met its threshold for approval or not? And then the second area that you can kind of think of deliberately, then is the release of funds. So, that is to say that just because something’s operationally approved, doesn’t mean the check’s gonna go right out the door, or the payment’s going to be immediately released. This notion of release of funds is, think of it as a kind of rule-based approval or other pay controls, as we call them, that you can put on release for payment.
And these can be controls such as, just stop gap measures until you get to take a look at it, maybe reconcile back to the cash account to make sure you got adequate cash flow for the payments. Or other rules such as treasury rules like invoices in excess of $25,000 might require a second level of approval or dual approval kind of the old fashioned dual check signing. You can still maintain all of those types of best practices through pay controls in this notion of the release of funds.
And I was talking to a customer just last week that pointed out one of the major benefits for those secondary approvals was they can be done outside of the office. Or they can be done over mobile technology or web technology because often times those people are not available and most of those payments are quite significant. So, that’s just sort of another area to be thinking about. You know fraud protection is on the mind of every business today. Unfortunately, about 70% of all companies surveyed would say they’ve experienced some form of fraud. We could spend an entire afternoon on just this one subject, but I choose just to keep this point very, very simple and very basic.
Jim: But I choose just to keep this point very, very simple and very basic, and I think it’s an excellent inclusion in takeaway. And that is simply this, the vast majority of financial fraud today involves a paper check. So, therefore, I think it very sound reasoning and very reasonable to assume that the more you can eliminate paper checks from the process, the more you decrease your exposure to fraud. So, again just a very simple fundamental thing, if it is true, which a lot of data backs it up, you know, it says that most fraud is around a paper check. Elimination of paper check is a very good method of fraud protection.
Lastly, I want to discuss something with you and I think this is a good topic for, given that 55% of you are already making electronic payments in some form probably with some type of credit card, virtual credit card or perhaps with ACH. We see a lot of what we call self-hosted ACH within the accounting system. I just want you to think about something that’s becoming a hot topic in the financial risk circles and it’s this. And I’ve kind of entitled it the Transfer of Risk for ACH.
And again, I’m speaking now to those of you that may have already set up ACH payments yourself within your accounting system, which is a capability of most sophisticated accounting systems. And I applaud you because while you’re realizing some of the benefits of automated payment you know, to those vendors, I also in same breath, warn you a bit, but you have assumed some risk about choosing to maintain their banking information within your system. In the event of a data breach, and unfortunately, we’re seeing more and more cyber-attacks and data breaches from companies that are very well-managed. Like the Targets and Home Depots of the world. But in the event of a data breach or even a misuse due to internal fraud, you could have some liability there if you’ve kind of taken custody of one or more of your vendors’ banking information, basically your vendor’s bank accounts.
So, generally speaking, it’s best practices to avoid acquiring and maintaining vendor bank account information all together in your own native system. There are other ways, and I’d strongly encourage you to explore some of these other ways to accomplish the same results and the same benefits of self-managed ACH. While at the same time mitigating both your reputational and liability risk that housing that information yourself might bring in to your existing business.
Again, any further questions on that subject, please feel free to submit ‘em, but it’s you know, I like the old joke, I read an old joke once that said, “I wouldn’t even know what to do with your social security number.” And I kind of apply that same humor to this case. Best practice again, is to just simply in first place not take on that maintenance of one your vendor’s bank information. There are other ways to do that that put up a greater protection shield.
Now, as we get to the homestretch here let’s talk a little bit about better visibility into payments, and this is something that again, taking a more holistic view, I think will help improve supplier relationships as you implement some of these new practices that are now available into your system.
Internally with more advanced accounts payable automation, you really should have insight not only to where an invoice currently stands at a particular moment, but also with data and timestamp detail, the entire history of each step along the way in the approval cycle along with any relevant comments that are made by the approver.
So, again this notion of a digital invoice coming in to an intelligent routing system, starting out being improperly coded in each step building value to the process, will give you an instant breadcrumb trail if you will, to where that is in the approval process. Now keep these steps in mind here, and this kind of documentation from an invoice routing an approval system in mind as we go to the next slide and talk a little bit about the supplier or vendor prospective.
In current technology, much of what I just shared with you there in terms of where things stand in the approval process can, based on your discretion, be shared with your vendor in a supplier portal. What we’re trying to promote today is something that’s probably near and dear to everybody’s heart, and that is to try to reduce phone calls coming into your business. And you’ve all gotten the call, it goes something like this, “Where’s my check?”
Vendors creating payment status phone calls back to you. A good supplier portal can, in our view, in our measurements, can actually reduce payment status phone calls by your suppliers to a high degree of about 90%. And so, if you can give a supplier the visibility they need into payment status through a supplier portal, that’s a major gain in terms of cutting down productivity impediments that really don’t add a whole lot of value back to your system.
So, our goal there is to encourage the use of adoption supplier portals reducing kind of going to rude calls and reducing those phone calls that are inevitably coming in, that can end up resulting in a lot of duplicate invoices, and a lot of paper chase along the way. So, supplier portals is a big part of that, and those supplier portals can also be used for vendor submission of invoices or bottle up communication on outstanding invoices.
Now, in addition I want to point out one other thing with accounts payable automation providers. Most quality organizations will provide constant monitoring and verification of payment received and on a more of a timely basis. And so, you know, most of us in business today our first indication that a payment has not been received goes back to point one. The call comes in and it says, “Where’s my check?
Just to use our company as an example, if we write a manual check to a vendor, we wait 21 days for that check to clear. And if that check is not cleared each and every check is not cleared within 21 days, we’re on the phone with that vendor, with that supplier talking to them about the status of that check. Did they receive it, has it deliberately not been cashed at this point in time, did it get lost in the mail, you know, those types of things. And immediately proceed with that before it has to go to any type [inaudible 00:31:23] process or something like that.
One of the benefits in terms of payment verification with electronic payments, is its almost instant. Normally the vendor has funds cleared same day, or within a few days if it’s ACH. We can have visibility and you can have visibility to the fact that that payment has been received.
One big way to improve vendor relationships, and particularly with electronic payments, is good remittance information. So, simply teeing up the question of or the story that a supplier has received a check or has received an electronic payment, what was it for? They need to be able to post it properly on their end as well. So, I’d like to show you an example here of what we simply call rich remittance information.
And mostly this is coming through well enough on your side that you can see it very, very clearly. It starts with a description of the gross amount of the check, and on whose behalf, that, excuse me, not check but just payment, on whose behalf that electronic payment has come from. And down below I ask you to pay special attention to the detail around which the invoices are listed for which the payment is for.
So, for some of the invoices these could be full payments, these could be partial payments. Discounts taken, discounts not taken, etc. But that further information on all the sum of those invoices should tie out with the payment amount of the electronic payment that was received. Now, this probably seems like a very good idea, and I think it is, but I bring it up primarily to say in your evaluation of advanced accounts payable automation as it pertains to electronic payments, don’t take this for granted.
This next example, it’s like the old saying, “I guess you can only serve as a bad example.” I’ve called it “the not so rich remittance information” and this is not gibberish, I just typed up for this presentation. This is an actual facsimile of a remittance information that’s provided by an accounts payable electronic payment provider that will go unnamed. But what this does is requires yet another layer of technology on the other end to decipher, and this coat string here can, in deciphering, can prove to be very, very problematic, particularly when multiple invoices are paid with the same electronic payment.
So, again, rich remittance information is a way to please your vendors, to service your vendors, to make it easy for them to identify what this particular electronic payment is for. And it can differentiate quite a bit from vendor to vendor. So, again one last time before we get into our summary here, I encourage you to post any questions that you may have, thoughts that are stimulated through this process. And let’s just review and [inaudible 00:34:35] on your own time. So, let’s just review and some of the few takeaways.
So, when it comes to paying vendors faster and more accurately, just understand there really are wins on both sides. For you as the payee and for them as them as the recipient of payments. And be very holistic in your evaluation of accounts payable automation, and be sure to take vendor satisfaction into consideration. Strongly looking among other things at remittance information and looking at choices.
Now, second point in terms of control over your accounts payable, early adoptors of electronic payment processing have really determined that they have far greater control over their payments and their cash flow. That’s just a fundamental point that we know our customers have experienced. And again, I stick to that because there is a logical and natural fear that somehow electronic payments are going to give me less control or I’m going to lose control. Something’s gonna happen automagically and really nothing is further from the case. And so, takes some great comfort in that.
And lastly, providing your vendors and suppliers good access generally through a portal and through rich remittance information with their payments, will greatly reduce the number of phone calls, it will greatly reduce duplicate invoices and just a general frustration with kind of that results in that phone call of where is my check, overall.
So, those were just kind of three major takeaways that I want to reinforce and lift up to you, and please let me know how we can help you if you don’t mind, by taking one last polling question, and then I’ll turn it back over to Lauren. And that is just to answer one simple question for us, and we’ll know how to appropriately and professionally follow up with you. Are you] just here to learn today which is basically fine? Or if you’d like further information or even to see a demonstration of these notions put into action here, we would be glad to set up a 30-minute demonstration with you and drill into your specific priorities.
Lauren: Great, thanks so much Jim, and again thank you all attendees for listening very attentively this far. We are now in the Q and A portion of our webinar today. And as a reminder, you can type your questions into the chat box on your right, and we will adjust them as much as we can.
Again, a person had asked if we will be sharing the presentation afterwards, and that is correct. We will follow up and share everything with you by email at the end of the day or within the next couple of days. And first question that I’ll go to right off the bat is an attendee asking, “We use Sage as our accounting software, how well do you all integrate with accounting software?” Jim if you could address that?
Jim: Yes, very good. That question gives me an opportunity to first off to make sure we’re clear on something. That we kind of sit on top of the accounting software. What we do, of course, does not replace the accounting software in any way, it just enhances it and adds to it. We do integrate with, when you say Sage and given this is a construction audience, I assume you’re meaning either the Sage 300 CRE, formerly the Timberline software, or the Sage 100 Construction, formerly the Master Builder. We do integrate with both and we integrate in a very unique way with a product that we call Create-a-Check ePay 16.
So, if any you use that product that’s actually a integration hub we use that will let you both continue to print the checks you need to print locally on laser output plain paper stock. But also, just as easily choose invoices that you’d like to send to the AvidPay network directly to us through the same process that you’re currently using right now.
We do integrate, for our products to work, we almost have to integrate with the accounting vendors. And I’m very pleased to say that in today’s world across all of our markets we integrate with actually over 100 different top selling accounting systems today. So, integration’s very important, it’s a process to work seamlessly, and if any of you have questions about your individual accounting integrations, glad to take those offline. But in terms of the Sage Construction products the answer is certainly is yes.
Lauren: Okay, great thanks so much, Jim. And another question that we have here from the audience is, is there a cost for this service?
Jim: Yes, there is cost for the service and this is kind of the fun part because the cost of the application is really, really simple. I’ll just give you some ranges because your buyins can dictate prices, but our costs are all transactional. So, it’s sort of a pay as you go plan, and we’ve talked about two major things today, two major categories, invoice routing and approval and then we’ve talked about payment. And just to give you some broad ranges on that, our charges are somewhere between a dollar and a dollar and a half per invoice. And then you get to use the invoice routing and approval software at no additional cost. So, we approach this as much as a service as we do as a software product.
So, again all of the software technology is available to you and we charge on a transactional basis. And that number can vary a little bit based on whether you want to do full service, for example, if you want to have all of your invoices routed to us to receive and then route back to you, or if you self-serve them yourself, actually that lowers the cost a little bit.
But the cost is very easy to justify and the news gets even better when it comes to payments. Our price for payments and again, can vary based on value, but the takeaway number I’ll give you is actually 68 cents a payment. Now I want you start to think about that a little bit, the cost of the postage stamp today is what, 47 cents? So, instead of again, instead of buying checks stock, printing check stock, envelopes, postage, the time it takes, those types of things. And then you know, to put a 47-cent stamp on top of it for 68 cents, now that’s a really [inaudible 00:41:26] to able to help you analyze that. It creates a great deal of time savings as well back to your business. That’s probably the most valuable thing we give back to you, is as much as 50% of your time can be spent on doing a more productive task. Glad to answer any more payment questions one on one.
Lauren: Yes, yes. Again, please do a follow up with Jim, his email address is [inaudible 00:42:00] right in your chat box, if you have any more questions. Another question here that we have from the audience is, “What percentage of the fees off of the VCP do we get as a rebate, meaning we as in the company using the system?”
Jim: Yeah, good question and gosh, we’re in the political season so, I hate to answer questions with it depends or not being straight on that. Let me repeat one example that we gave, and that is a, on average, we’re seeing for about every 10,000 payments a month, we’re seeing on average I believe, about $7,200 in annual rebates. We have kind of a unique way of doing that. We can actually take a download of your vendors confidentially that you provide us, run ‘em against our vendor network which again, given that we have 300,000 in network already, it’s a pretty good chance many of the vendors you’re paying we’re also paying as well. We can do an analysis of that and see what an estimated payment would be by company. It really depends on the volume and of the size of the payment amounts, how many are currently taking electronic payments.
Another thing we can do is, we’ve gotten pretty good at estimating this, and we can even go into an agreement with you guaranteeing a minimum payment based on your vendor analysis for the first, that the rebate will be a certain dollar amount.
And so, it’s not really an easy question to answer as a percentage, but it is a very easy question individually to answer, given that we can go through a vendor analysis in an automated way with your existing vendors and give you a pretty good estimate of what your annual rebates would be and even follow up with some guarantees in that area.
Lauren: Okay, great thank you so much, Jim. Another question we have is, “How long does it take to get up and running with avidexchange?”
Jim: Okay, good question, I can tell you that it’s nothing like, you know, the timeframe that it takes for like, URP systems and those types of things. We’re looking at some current numbers right now, and just to give you a range, from the time you begin your implementation till you’re up running and using these processes in your business, we’re looking, the fast track is around 45 days, comfortably speaking. And its really kind of based on your schedule and how rapidly you want to get this. I would leave this seminar by saying that somewhere between 45 and maybe 80 days is about a good timeframe to think about full implementation of invoice and payment.
One of the things that can speed that up is if we currently have integration like the folks that asked the question about the Sage, the Sage 300 Construction products, we’ve got many, many users on that product. The integration’s very, very seamless. So, there’s some time savings there, but it’s around to say you know, maybe 45 to 80 day implementation depending on the volume, how hard you want to push, but it’s easy to put that again on a time frame. And then we partner together with our implementation team just to see how fast you want to push on that.
Lauren: Okay, great thank you so much, Jim. We don’t have too many other questions, if anyone does have another question, please do type it in the chat box now and we’ll get to it. Anything else that we don’t get to, again, we’ll follow up with you individually after the session is over.
As a reminder, and as you know when you registered, we will be giving away a $100 amazon.com gift card. So, that’s a pretty exciting incentive for all of you who have joined today. So, checking out the chat questions, I’m not receiving anything else. So, I will go ahead and announce who our winner is, which we selected during the session.
The winner is Jacqueline [SP], the CFO of the L.C. Whitford Company, so congrats Jacqueline, we’ll be sure to send you your amazon.com gift card. And again, if there’s any questions we’ll get to them. No? All right, well thank you much everyone, that concludes today’s webinar, and we’d like to thank avidexchange for being a sponsor. Please take a moment to subscribe to Construction Executive if you haven’t done so already. And please check out the links on the next page, so that you can interact with us on social media.
Also, please set the time to complete the short survey that will appear on your screen momentarily. And as a reminder avidexchange will send you an email with a link to the recording and presentation, as well as a link to download the Tech Savvy Buyer’s Guide for AP Automation for Construction Professionals. Thank you very much for your time and attention today, you may now disconnect.