Global PayEX optimizes working capital through AR/AP automation

As the industry continues to digitize, some dark corners of the finance world risk being left behind. Undoubtedly, B2B financial processes have been neglected in favor of digitization in the B2C space. Today, a host of innovators are beginning to recognize the potential for greater disruption in B2B payments and related processes, and one of the most overlooked areas is Accounts Receivable (AR) and Accounts Payable ( PA).

Global PayEX offers a SaaS platform that helps businesses automate and digitize AR and AP processes. The company wants to make B2B payments as seamless as paying a utility bill (C2B payment) and has designed digital customer journeys, including on mobile, that eliminate friction in B2B payments. Based in Connecticut, USA, the company is five years old – which means there are no legacy tech hangovers – and the company already has a big-name clientele such as 3M, Bridgestone , Stanley Black and Decker, Reiter, Hafele and many other medium to large companies. He has enabled his clients to achieve significant operational efficiencies within their AR and AP departments and processes.

Implementing the Global PayEX platform can reduce the number of days sales are unpaid (DSO) – the most important measure of RA. It can also speed up the time it takes to reconcile a payment and automate accounting in ERP/accounting systems, which can shorten the overall payment and reconciliation cycle and allow customers to place their next order sooner.

“It becomes a very powerful acceleration of revenue for our customers and also improves customer satisfaction for our customers,” says Naru Ramamoorthy, Chief Revenue Officer. When Global PayEX platforms are fully implemented and integrated into a business, it can save them between 1% and 4% of their annual revenue.

Naru joined MphasiS at an early stage in 1999 and worked closely with the founders of MphasiS – Mohan Krishnan (CEO and Founder of Global PayEX) and Jerry Rao and Jeroen Tas (initial investors of Global PayEX). MphasiS grew into a multi-billion dollar company and was acquired by EDS and later by HP. He has over 20 years of experience working with a full spectrum of B2B payments and processing companies. At Global PayEX, Naru is responsible for global growth, both in existing markets and new markets.

“That’s what I specialize in,” Naru said. “Essentially, taking concepts that have proven successful with an initial customer base and multiplying them by 100, by 1,000. That’s what I love to do, that’s why I came to Global PayEX.

Solve unique challenges across AR and AP

The company’s platform can be thought of as two distinct “halves”, one for AR and one for AP. It connects to a company’s ERP (this integration is the only part where custom code is required), which means that the interface can be customized according to the client’s accounting rules in their ERP – on all major ERPs like SAP, Oracle, Microsoft and others.

On AR, Global PayEX provides two primary digital platforms: Electronic Bill Presentment and Payment (EIPP) and Reconciliation (Treasury Application Automation). On the EIPP platform, Freepay™, end customers can view invoices and credit/debit notes, make payments and deductions, view statements, and EIPP automates the recording of accounting entries in the ERP of the seller. The reconciliation platform, AlgoriQ™, automates the reading of documents such as remittance/payment advices and bank statements, and automates reconciliation and posting to ERP (automated accounting). Focus is on deductions – AlgoriQ helps identify, flag and resolve deductions made by end customers. AlgoriQ is rapidly gaining traction for e-commerce market reconciliations between buyers like Amazon and Walmart.

About AP Global PayEX provides a vendor portal for vendors and vendors to view documents such as purchase orders, receipts of goods, and payment advices. Suppliers can upload invoices through this portal. The Global PayEX platform also enables invoice processing by using automatic invoice reading in all formats, providing validation workflows and automating invoice entry into the ERP.

AR/AP platforms also enable finance workflows and automation between anchor companies, banks, and corporate buyers and suppliers. Finally, PayEX platforms can enable direct automation with all major ERP platforms.

AR challenges are very different from PA challenges, but there is still an interaction between them; after all, a seller’s AR is a buyer’s AP.

In Accounts Receivable (AR), challenges faced by sellers include lost or misplaced invoices, the cost of accepting payments (especially physical modes like checks), resolving partial payments or deductions, and payment delays. AR teams, sales teams, and end-customer AP teams spend a lot of time on emails and phone calls to resolve these issues. EIPP solves all these problems by digitizing and automating the interaction between sellers and buyers.

Another key AR challenge with institutional clients is related to deductions. Each customer can have different deduction codes to refer to the same events, whether it is a return of goods, a shortage of goods or a withholding tax. Even customers in the same industry may have different terminology for the same deductions. The Global PayEX customer (vendor) may also have different terminologies in their ERP to refer to these events, for example “return to vendor (RTV)” versus “return of goods”. Global PayEX’s reconciliation platform, AlgoriQ™, automatically reads these incoming documents and reconciles the different document formats, deduction codes and terminologies. This frees up time for the financial teams of their clients’ companies, who are no longer faced with the daunting task of having to sift through all this complex data.

In AP, the system functions as a mirror image. Suppliers can upload their invoices to a supplier portal, and the Global PayEX platform is able to automatically read these invoices and convert them into a standard format. This also makes it possible to validate and automate the processing of this invoice in the client’s ERP.

Using data to integrate financial services into Global PayEX

The end-to-end payment journey means that Global PayEX sits in the middle of a lot of data, which it can use to bring greater value to its customers. The platform can identify behavior patterns and learn how customers pay their bills and, more importantly, when. If a customer is late with their payment, the system can obviously send reminders automatically and chase customers for money – but it’s so smart that it’s able to distinguish between different customers and understand when a pattern of behavior is out of the ordinary for this company. This intelligence enables an extensive dashboard, which can present data in a way that a company’s CFO, credit manager, or CFO can interpret and act upon.

Global PayEX is also looking to integrate integrated finance into its platform. “We try to integrate financing into these B2B workflows where we invite banks and non-banks to lend through our digital ecosystem,” says Naru. The system already knows which of a supplier’s distributors have access to funding because it performs the reconciliation for them, so Global PayEX can anonymize this data and send it to partner banks or lenders. This data allows them to make underwriting decisions and provide financing for a certain range and/or customer segment.

When a new line of credit becomes available, buyers (distributors) log into Global PayEX’s FreePay™ EIPP platform and find that they now have a credit limit of up to £50,000 or £100,000 provided by a partner institution. It is the distributor’s decision whether or not to accept this line of credit. If they do, they’re onboarded by the institution in the usual way, and later they’ll see a new payment method in the app when they come to pay a bill that allows them to pay with that credit.

“The reason banks are interested is that they want to provide a differentiated service to their corporate banking customers in terms of accounts receivable/pays or corporate banking, and banks don’t necessarily have these sophisticated technologies,” says Naru. “So they use our technology; we are the back-end while the bank is the front-end offering these technologies to the customer. Our latest partnership is with FIS, the payments giant, where they white label part of our stack globally for their customers. Several other global and regional banks leverage our platform, such as JP Morgan, Standard Chartered, BNP Paribas and Deutsche Bank.

Target new markets and improve product functionality

When Global PayEX was launched, it initially focused on the Indian market, where it has now established a dominant position for itself. The company now has a presence in the United States, where it has a few big-brand clients and a pipeline of prospects. When Naru talks to us, he’s in London doing some due diligence and laying the groundwork for a future presence there. Global PayEX wants to be online in the UK, with boots on the ground, by the fourth quarter of this calendar year.

This marks continued expansion for the company, which hopes the US and EMEA can become significant contributors to the group’s revenue. Over the next 12 months, Global PayEX will focus on growing its penetration in the US market and expanding into the UK and continental Europe. From a regulatory perspective, this presents a unique challenge: Europe has to deal with various compliance requirements, including GDPR.

From a product perspective, the company is working on globalization, supporting more currencies and languages ​​to enable further market expansions in the future. It also examines new requirements such as electronic invoicing standards and new payment mechanisms such as real-time payments, building them from a product stack or enhancing the product stack to include them. Global PayEX will continue to invest in AI/ML technologies to improve the efficiency of its automation, giving its platform enhanced capabilities to read and contextualize document formats.

Naru explains, “We want this to achieve at least 9/10 document machine reading capability across all formats within the next 12 months, with an eventual goal being a neural network that has an accuracy of over 99 % from day one, in terms of reading any random document related to AR and AP. »

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