If you’re not from New York, specifically New York City, maybe you haven’t heard that NYC had just elected a new mayor in January of this year, Eric Adams. However, putting whatever feelings you have about him to the side, he did something interesting that caught my interest. He requested that his first three paychecks be paid to him in the form of Bitcoin, the online digital currency that has captivated millions for the past six years. This request was surprising and got me thinking, “Is it possible to pay an employee in cryptocurrency?”
Today’s article is going to cover some of the legal statutes that come along with paying employees in crypto.
Is it Legal?
The short answer is: No. Technically, it’s still illegal for businesses to pay their employees in cryptocurrency. This is because regulations set up by the U.S. Department of Labor categorize cryptocurrency as an asset, and it cannot be used as a form of payment to pay employees. The Fair Labor Standards Act (“FLSA”) states: “the ‘wage’ paid to any employee, under the conditions which it prescribes of the ‘reasonable cost,’ or ‘fair value’ as determined by the Secretary”. Cryptocurrency does not fall under those guidelines because of its price fluctuations and since it’s a decentralized form of currency.
I know what you may be thinking, “What about foreign employees that work with companies in the U.S. but are paid in their national currency? How is that any different?”
Foreign currency is initially converted into U.S. dollars, and if it matches the FLSA threshold, only then can you pay someone with foreign currency. A similar concept can be used for paying employees in crypto. However, the DOL and courts are yet to give their opinion on if cryptocurrencies can be considered as a form of foreign currency. Hence, the situation is a little ambiguous. Employers need to be cautious of the situation if they are trying to adopt cryptocurrency as a payment to their employees
Despite all these legal obstacles, Mayor Eric Adams still was able to transfer his city paycheck into the cryptocurrencies Bitcoin and Ethereum using Coinbase, a platform that converts funds into cryptocurrency. Before his funds were made available to him via typical banking methods, Coinbase pulled his paycheck from his bank account, transforming it into Bitcoin and Ethereum.
My Experience with Converting my Paycheck
Following suit with the Mayor of the city I reside in, my employer (oAppsNET) paid me how they usually do with direct deposit and imminently had my funds transferred into cryptocurrency via Coinbase. Playing it safe to the wire, I only converted half my paycheck into a multitude of online currencies. My first thoughts were, “This is pretty cool.” But then, there was a dip. Hours my Coinbase account was funded, Bitcoin dropped 1.92% of what I bought in at, going from 43,000 to 40,000 in a blink of an eye. Ethereum, which was at around 3,100 dropped by 2.84%, making it 2,900 a coin. And as it goes with the stock marketing, all the other currencies followed suit, and I saw the funds I added to my account seemingly dwindle. I didn’t panic, though.
Every company has an accounts payable or AP department. If you don’t have a separate AP department, then all the responsibilities are handled by the finance department. The AP department is responsible for maintaining the payment with vendors from whom you procure goods and services. They are a crucial part of a company and maintain good relationships with your vendors for a smooth exchange of services.
The AP department’s work revolves mostly around payments. How efficient your payment method is will decide how successful your AP department is. There are many payment options out there. It can be very overwhelming to choose one, especially if you don’t have prior knowledge in the field. Today we’ll be first telling you about AP automation which will revolutionize your AP department and give your company breathing room. On top of that, we’ll also be discussing a payment method that you should go for in order to increase the profit and efficiency of your company even further.
AP automation
AP automation, as the name might suggest, is the automation of most of the processes under AP automation. Most companies are switching to AP automation due to the huge amount of advantages it provides. It solves all of the underlying problems that are there in a conventional accounts payable environment:
Improves time management by minimizing manual work. Studies have shown that the right implementation of AP automation could save up to 25% of the time.
Manual processes don’t just waste time; they are money-eaters as well. A conventional paper invoice costs around $10 to process. Even if you are a small company, you will be spending a huge chunk of your expenditure on just processing invoices.
Everyone wants to produce more by working less. However, most AP departments are understaffed and overworked. Managing all the different manual tasks decreases their efficiency. AP automation does proper workload distribution and makes sure that the department isn’t slacking in any form.
The biggest problem is paper. If you’ve seen an office weighed down by stacks of paper, you know what I’m talking about. Organizing and working with paper is a big mess. Even if it is easy to work with, paper is not cost and time-efficient at all. AP automation removes the problem of paper by digitizing the processes and saving you time and money.
All the above-mentioned problems are easily solved by just switching to an AP automation system. Most workers are rooting for companies to adopt electronic solutions. Not only will they decrease workload but also increase the productivity of your workforce as working with digitized means is easier than doing something manually.
A big part of AP is payment, and it directly relates to payment methods. If you have adopted AP automation, you’ve already done more than half of the job. The only thing left for you is to pick a method that takes care of everything, and that is virtual cards.
Virtual cards
Although virtual cards are not widely used as of yet, studies have suggested that 30% of companies have already switched to virtual cards. This method will be the industry standard a few years into the future. It doesn’t have the disadvantages of other methods that are very popular right now.
ACH or automated clearing house is a method used quite a lot by companies. However, it can only process payment after 3 to 5 days. Wire transfers are another popular method, but using them will expose you to security threats. If you are not on a secure network, using wire transfers can prove hazardous. Similarly, purchase cards also compromise security in return for credit card-like features for trusted authorities. Virtual cards solve all of these problems easily.
A virtual card is a 16-digit unique card number that can only be used a single time. It works exactly like a credit card and can be used to pay vendors for goods and services. Here are some of the advantages of forcing companies to switch to virtual cards:
Virtual cards allow you to earn revenue on each payment. Hence, instead of just spending money on managing the AP department, you will gain some of it back.
Virtual cards are able to generate 1% cashback on the amount of AP spent. An immediate return on investment in this day and age is too good to be true, and yet it is there.
They allow you to streamline AP processes, and if combined with AP automation, the workflow will be smooth without any errors.
Conclusion
Studies have suggested that the AP automation industry will grow to about $3 billion in just a span of 3 years. The usage of virtual cards is also expected to see an increase of a whopping 7% in a few years. AP automation and virtual cards are the next big thing in the industry. If you want to stay competitive, you will want to adopt these strategies.
LYON, France and MIDDLETON, Wis. — June 30, 2020 — Esker, a worldwide leader in AI-driven process automation solutions and pioneer in cloud computing, today announced a strategic partnership with oAppsNet Partners, a systems integrator specializing in business solutions based on Oracle applications. The partnership is focused on providing Oracle customers with even more value and resources as they address procure-to-pay (P2P) automation through Esker.
With over 20 years of hands-on experience in the Oracle space, oAppsNet brings an unparalleled combination of application know-how and business experience to reinforce Esker’s integration with the Oracle solutions. oAppsNet chose to partner with Esker because of the true end-to-end experience its solutions bring to the user, providing seamless integration all the way through the ERP system.
“After our discovery of Esker, we learned that they offered solutions no other vendor on the market had and it was clear they were the best of breed in procurement and accounts payable automation,” said Rick Pollina, managing partner, oAppsNet. “It’s been a journey for us to actually find Esker, and we’re anxious to share with our customers because we know they’re going to love it. We can’t speak highly enough about it.”
Esker’s P2P automation solutions seamlessly integrate with Oracle’s ERP solutions, enabling companies to easily switch to paperless invoice and order processing. With paper and manual handling removed from the equation, companies can dramatically improve their workflow efficiency and staff productivity while providing full visibility and accountability from beginning to end.
Aside from their deep technology expertise with Oracle solutions, oAppsNet is customer-focused and follows a similar agile methodology for solution implementation, which were driving factors in Esker’s decision to partner with the company.
“Our automation solutions integrate with a wide range of ERP solutions, but this partnership is focused on reinforcing Esker’s investment in the Oracle business environment,” said Steve Smith, U.S. chief operating officer, Esker. “We’re thrilled to further improve the user experience for our current Oracle customers, and we’re looking forward to an enhanced implementation process for future customers.”
ABOUT OAPPSNET PARTNERS
oAppsNet Partners is a US-based company that specializes in the digital transformation of every facet of your organization. As an Oracle-certified partner with over 25 years of experience, we can ensure that your business’ transition to the cloud costs less, requires less time, and provides you with the efficiencies that will drive your company to the next level. Our proven and comprehensive approach to projects involves a deep dive into existing business practices to provide you with not only the most optimal cloud solution but also the one that leverages your organization’s existing strengths. We pride ourselves on ensuring that every project is successful through in-depth digital training tailored specifically for your company. oAppsNet is based out of Colorado but has employees across the U.S. For more information, please visit oappsnet.com.
ABOUT ESKER
Esker is a worldwide leader in AI-driven process automation software, helping financial and customer service departments digitally transform their procure-to-pay (P2P) and order-to-cash (O2C) cycles. Used by more than 6,000 companies worldwide, Esker’s solutions incorporate technologies like artificial intelligence (AI) to drive increased productivity, enhanced visibility, reduced fraud risk, and improved collaboration with customers, suppliers and internally. Esker operates in North America, Latin America, Europe and Asia Pacific with global headquarters in Lyon, France, and U.S. headquarters in Madison, Wisconsin. For more information on Esker and its solutions, visit www.esker.com. Follow Esker on Twitter @EskerInc and join the conversation on the Esker blog at blog.esker.com.
Running a business is an extremely challenging task. You need to manage a lot of different stakeholders, and you have to keep track of all the different vendors who work with you.
Without the right tools and technology, it can be nearly impossible to manage everything effectively. But with vendor management software in place, you can easily track all your vendor payments, automate workflows and processes, analyze payments by different factors (like timeliness or cost), monitor contracts at risk of being breached in real-time—and more.
As a business owner, you want to ensure that your vendors deliver the best possible services for your organization. You also need to ensure that you’re paying them on time and in full.
Vendor management software can help you manage your vendors more effectively and efficiently. It will allow you to get a complete picture of all the different vendors working with your business—and ensure that everything is running smoothly at all times.
In this article, we’ll go over some of the most important benefits of vendor management and explain how it can help you manage your organization more effectively.
1. Vendor management can reduce risk
If you are a small business owner, you know that there is no room for error when it comes to your operations. One mistake can cost your company thousands of dollars in lost productivity and customer satisfaction, not to mention the potential damage to employee morale and retention. This is where vendor management comes into play. By closely monitoring vendors before they become partners with your business, you can ensure that their services will help reduce these risks and make sure that your company stays on top of its game.
The first and most obvious risk reduction is the quality of your product. Without proper vendor management, you may be working with a supplier whose products are subpar or even dangerous to use. This can lead to customer complaints and potential lawsuits if these customers experience any kind of injury due to faulty equipment.
Vendor management is also important because it lets you keep your company’s reputation intact. If you are working with a supplier who has been accused of unethical or illegal practices in the past, this can reflect poorly on your business, especially if those accusations are true. Whether it’s a risk of poor quality, poor service, poor delivery, poor compliance, a potentially bad reputation, or simply customer dissatisfaction, there are plenty of ways that vendor management can be beneficial for your company.
2. Vendor management reduces costs
There are many ways that vendor management can reduce costs. Here are just a few:
Procurement costs will be reduced by being able to find the right suppliers; suppliers who have competitive prices and quality products.
Supply chain costs will be reduced when you use one contract to purchase all of your supplies from one supplier. This reduces the time spent on procurement and increases efficiency in completing orders from multiple locations or countries with different languages, currencies, or other cultural differences that could slow down delivery times.
Operations costs will also be reduced because there is less manual work involved when managing vendors instead of purchasing directly from them. Thus, it becomes easier for employees to do this type of work when they know what they’re doing.
Compliance costs go way down by using a vendor management solution that specializes in vendor reporting to keep track of all changes within your organization.
The cost of doing business can also be reduced when vendors are managed. For example, if you need to purchase supplies from multiple locations or countries with different languages or currencies, it’s important not just to keep track of those things but also what type of products each company sells and their payment terms.
A supplier management system will allow you to do all this and more by providing improved visibility into how much each vendor owes in real time.
3. It offers better visibility on projects
If you want to get a clear picture of the current status of your project, vendor management software is a must-have.
The software helps in the planning, monitoring, and reporting of projects. It provides you with a comprehensive view of all aspects of your project, including how much time has been spent on each task, what progress has been made, and what issues or risks remain. This enables you to make better decisions about managing changes in processes as well as opportunities for improvement based on actual data.
Vendor management allows you to identify issues and risks before they become problems. It also allows you to see the impact of changes in the project on a real-time basis so that you can make adjustments accordingly. If any critical tasks need urgent attention, these will also be highlighted.
4. It aligns business strategies and goals
Vendor management can align your business strategies and goals with vendors. The vendor management process should be in sync with the overall business strategy of an organization. It helps create a clear understanding of what vendors are doing regularly, which will help you understand how their performance impacts your organization’s success.
Vendor management also enables companies to take advantage of new opportunities for growth and profitability by providing them with valuable insights about vendors’ processes and products that may be used to improve operations. A good way to do this is by setting goals at the beginning of each new year. Write down specific deadlines for when vendors need to complete projects. Track progress on those goals, and check in with them regularly throughout the year to make sure they’re meeting their commitments. This will help keep your staff motivated while keeping costs low.
Moreover, it is important to communicate these goals to vendors when hired. Let them know what you expect from them and how they can help you achieve your business goals. Communicate what success means to your organization in terms of performance, engagement, and other metrics related to vendor management.
5. It enables better control over operations
Vendor management is a proactive approach to managing business operations. It helps you to focus on the right vendors and the right services, manage your operating cost-effectively, manage your operating risk effectively, and manage your operating compliance effectively.
As a result of this control over operations, you can more easily predict how much money each product or service will bring into your business. This allows you to plan better for future expenses. In addition, if you have to work on your own or with a team of employees, having control over your business operations will make it easier for everyone involved. You won’t feel hesitant about asking questions or getting help when needed.
It also gives you control over the quality of your products and services. Finding good vendors and establishing strong relationships with them helps to ensure that they are all providing products and services at their best level.
6. It improves vendor relationships
Vendor management improves vendor relationships by making them more transparent. It provides visibility into the purchasing process, allowing suppliers to see where their products are in the pipeline and when they will be delivered. This allows vendors to plan for their own production and delivery schedules so that when a new order is placed, or there’s an inventory issue, each supplier knows what’s coming up next—they can prepare accordingly.
It also improves vendor relationships by making them more efficient. Streamlining communication between buyers and suppliers over email or phone cuts down on delays due to miscommunication or misunderstandings that could otherwise cause bottlenecks within your supply chain when multiple parties are involved. Plus, it helps speed up payments (if you use your VMS as an automated payment system) which means faster cash flow.
Another way vendor management improves vendor relationships is by making them more effective. Using this kind of software to manage all your vendors makes it easier for them to do their jobs. With less paperwork and fewer emails going back and forth to get things done, they can focus on what’s important: providing excellent customer service or creating better products that meet consumer needs.
7. It leverages resources, tools, and technology effectively
Vendor management software can be helpful in this regard. It’s a tool that integrates with your CRM system, allowing you to manage your vendors, suppliers, and contractors in one single location. This is great for companies with multiple vendors or suppliers because there’s no need to use different tools for each group.
The best part about vendor management software is that it’s so convenient. You can use a single application to manage your vendors, suppliers, and contractors, ensuring everything gets done on time.
However, it’s worth noting that not all vendor management software is created equal. Some applications offer more features than others, while others might have a smaller price tag to match their lack of functionality. Make sure you choose the right tool for your business by researching different products and reading reviews from other users.
8. It leads to better communication between stakeholders and vendors
This is another one of the more obvious benefits of vendor management: it leads to better communication between stakeholders and vendors. When there’s a clear understanding between the two parties, it becomes easier for them to work together. This can mean resolving conflict resolutions faster, but also just generally being able to work through issues as they arise.
For example, stakeholders might not understand how the vendor’s work affects their business. Having that open line of communication makes it easier for them to get answers to those questions. Similarly, a vendor might have something they want to discuss with the stakeholder. It could be a question about how their work is going or an issue during the project.
Another benefit is that it helps vendors understand their clients’ priorities better. While this may seem like a minor issue, it’s actually quite important in the long run. Clear communication between stakeholders and vendors can make all the difference when running your business successfully. When there’s a clear understanding between the two parties, it becomes easier for them to work together.
In the end, it’s all about improving your business. When you have better communication with your vendors and stakeholders, it makes life easier for everyone involved. This means you can get more done in less time, which is always good.
9. It mitigates conflicts within the organization
Effective vendor management can mitigate conflicts within the organization. Conflicts are often a result of miscommunication and a failure to properly manage expectations. To avoid these problems, it’s important to be clear about what you need from your vendors and how they should provide it. This can be done through effective communication practices such as face-to-face meetings or workshops.
Effective vendor management processes are also an important aspect of effective vendor management. When vendors know exactly what is expected of them and when they’re expected to deliver their products/services, there won’t be any surprises for either side.
10. It ensures compliance with regulatory standards and industry practices
Vendor management is the practice of aligning your business with best practices. It ensures compliance with regulatory standards and industry practices.
This means that a vendor management program will help ensure your company follows the rules, laws, and regulations so that you don’t have any problems in the future when it comes time to renew licensing or certification requirements. These compliances include the likes of:
Compliance with laws and regulations
Compliance with industry standards
Compliance with industry best practices
Compliance with industry practices
The importance of complying with legal requirements, industry standards, and best practices cannot be overstated. If you’re not compliant, your business can have serious consequences, including fines or even jail time. Compliance with industry standards and practices is a win-win for both the business owner and their vendors. This keeps them on track with regulations while helping to reduce risk.
Conclusion
Having the right vendor partners is essential to the success of your business.
Vendors can be some of the most important people in your supply chain, so it’s important that you treat them well and give them every reason to want to work with you.
The key to successful vendor management is being proactive.
A good program will help you stay on top of your vendors, which means that you can avoid costly problems and build stronger relationships with them.
Accounts payable processes are daunting and complex at their best; manually processing your invoices can take weeks, and sometimes even months. Manual processing also opens the doors for blatant human errors, unauthorized payments, fraud, and theft. Fortunately, there are several AP automation software options available in the market today.
You need to keep watch on certain items while choosing an AP automation software to make sure it is a good fit for your business, providing the return of investment you want to achieve. In this article, you will find a list of handpicked recommendations that can help your automation process.
We also take an in-depth exploration of a few prominent AP automation software and give useful information about the features they provide to help you choose the application that aligns with your business goals.
The Groundwork to Choose the Best AP Automation Software
Understand and Outline Your Current Processing Progress
Before deciding to invest in automation, you should determine the average time taken to get your invoices coded, approved, and processed for payments. Map out your workflow gaps, and find out where your Accounts are Payable clerks spend the most of their time. Whether it’s inputting and entering invoices into your Enterprise Resource Planning software, or matching the purchase order, receipt, and invoice.
Search for Areas of Workflow Improvement
When trying to improve your Accounts Payable workflow, look for processes that can be improved with the help of automation. For instance, if manually typing and entering invoices is consuming your clerk’s time, you could look into software that provides AI-powered invoice capture tools. Automation can also help you modernize two and three-way matches among invoices, purchase orders, and delivery receipts. Your findings of shortcomings can help you prepare solutions before they turn into a real problem. This will also allow you to estimate whether your Accounts Payable is prepared for automation.
Be Specific With Your Goals
Once you get the idea of what to work on, it is essential to set future goals. This will help you monitor your progress. The average Return on Investment for your AP automation should be in the range of 12-18 months. This timeline is subject to your invoice counts and available AP clerks. Once the system is automated, you can focus on relocating your existing resources to high-priority tasks like timely closing, prevention of late payments, and customer and vendor support.
Research Software You Wish to Procure
While it is natural to be unsure of the choices, meticulously planning and researching the software that you want will help you choose the one that is the perfect fit for your business. Look for testimonials from other firms that have implemented the system you are considering.
Three things to keep in mind while researching the software reviews are:
Verify the reviews are made by verified users
Ensure open lines of communication from the software provider
Does the provider regularly release updates and keep up with the development of new technology
Software Must Haves
The program you select has to have a user-friendly interface that is quite comprehensive and simple to explore. It should also enable electronic workflows to reduce the number of repetitive AP operations such as entering data, converting paper invoices to digital files, and connecting Enterprise Resource Planning (ERP) and other advanced financial software for better comfort.
Data Security
Your automation software processes and stores sensitive financial data. Your software needs to be built with data breach prevention features. Cloud-based systems can be a solution as they are isolated from internal servers. As a result, any illegal access to internal systems is denied. External users and other parties can exchange data via the application and are never able to access your system. Make sure your software has encryption features and two-factor authentication. In a scenario of an accidental breach, your software must have backup processes to prevent loss of financial data.
Multiple Payment Options
Having secure integrated payment portals in your automation software can be useful in fulfilling authorized payments. Payments portals should include multiple payment options, namely:
Credit cards
Debit Cards
Net Banking
Applications that also procure bank statements and categorize the captured statement data using custom rules eliminates possible human errors.
Automation Features to Look for
The application should simplify repetitive tasks like data entry.
Includes document capture and dynamic imaging features for converting invoices into electronic data
Capable of processing large volumes of data, such as invoices and credit memos
Provides centralized data management, for searching and receiving documents
Provides a two-way or three-way match verifying mechanism between invoices and the same purchase order to keep an eye on money owed.
Complies with AP processing standards and regulations.
Software Integration
The software you procure must also integrate with your Enterprise Resource Planning system. It should also facilitate working through different platforms. Often, you will need third-party applications for Inventory Management, Analytics and Reporting, Project management, and Customer Relationship Management. Such third-party modifications should be updated on your automation software.
Accounting Methods
The software should be able to toggle between cash-based accounting and accrual accounting. A small business’s transactions are mostly cash inflow and outflow. The cash-based accounting approach works well in this scenario. On the other hand, the accrual technique should be considered by larger enterprises that conduct transactions on credit. These large enterprises record both accounts payable and accounts receivable. Many businesses begin with the cash-based method of accounting and eventually move to the accrual system. When it is necessary to process accounts payable data, automation should aid in keeping track of payables such as vendor invoices and operations costs.
Billings for Projects
In case your business recruits clients for some projects, your accounting system should be capable of handling project-based billing. Some modifications in your software can enable you to bill your client’s time taken working on individual projects. After that, timesheets may be transformed into invoices. The software allows timesheet approval before producing the invoice to avoid billing bottlenecks.
Tax Liability
Businesses are often under the scrutiny of surprise audits; you might often find yourself in need of software that calculates your business’s tax liability. Make sure your software can execute tax functions such as calculating multiple tax rates and tax liabilities, tax reports, and tax compliance.
Compare the Prices
Most AP automation solutions have a monthly membership fee, which can be paid monthly or you could also take an annual plan. When comparing pricing, though, check for less glaring charges. The most basic package may have limited functionality or allow you to handle a fixed amount of invoices each month. There are extra fees in the form of platform payment choices. Find an automation tool that charges a fixed fee rather than a per-user fee. Flat fees give the greatest overall cost reduction.
Conclusion
Keeping track of a company’s outstanding debts is critical to developing its reputation. A business’s AP must be managed successfully and efficiently. Since handling accounts payable may be stressful and time-consuming, using an account payable automation system is undeniably a better choice. If you follow these suggestions, you will be selecting the finest AP automation software available.
