Unique ROI with JAGGAER Pay

Any enterprise SaaS sales cycle will include a ROI calculation to demonstrate the benefits of adopting the new product. Hubspot marketing automation software enables a business to attract and convert more leads, growing top-line revenue. Netsuite enterprise resource planning software enables that same business to save on IT costs, impacting the bottom line. However, there are hard costs and subjective benefits to each, making the ROI calculation “soft.” Both are extremely valuable tools, but neither generates revenue nor reduces costs simultaneously.

When I hear the pitch “get paid to use our product” I think I am probably sitting in a multi-level marketing scheme presentation. Very few solutions directly impact both the top and bottom line. Modern FinTech and payments solutions are unique in their ability to decrease costs while generating actual dollars. JAGGAER Pay Powered by Finexio enables CFOs to reduce the fully burdened cost of payments while at the same time converting payments from a cost to revenue center.

Reduce Costs

The cost of payments can generally be broken down into two components – hard costs from fees associated with the payment method and soft costs from labor, fraud, etc. Each of these is reduced when using JAGGAER’s comprehensive payments as a service solution.

Roughly 50% of B2B payments across the United States are still made by check1

Despite the significant advances in digital payments over recent years, B2B payments still lag behind their B2C counterparts. Roughly 50% of B2B payments across the United States are still made by check1, and JAGGAER customers held true to this statistic in 2021, processing 52% of invoice payments on check. To produce a paper check, an AP department must maintain a printer, purchase check stock, and include postage. By converting paper checks to digital payment methods, such as ACH or virtual card, businesses reduce the hard cost of thousands of payments by more than a dollar each.

In addition to hard costs, there are numerous soft cost savings. By automating manual processes, AP teams improve overall efficiency. Consolidating all payments into a single, digital solution, the time spent producing multiple payment batches, printing and mailing checks, and sending emails with remittance information is eliminated. Furthermore, supplier payment information can be collected, verified, and securely stored through a single solution, avoiding time spent emailing or calling to manually verify account changes and conducting KYC and AML screening. Overall, AP teams using JAGGAER Pay Powered by Finexio see an 84% reduction in labor hours to process payments.

The last cost savings opportunity centers around fraud. Manual fraud screening processes, such as verifying bank account change requests by phone or email, are time consuming and error prone, and errors result in fraudsters successfully slipping past and walking away with thousands of dollars. JAGGAER Pay Powered by Finexio automatically verifies the identity of every supplier and validates their bank accounts, offloading the burden of fraud prevention and eliminating the cost of actual fraud.

Generate Revenue

The exciting part about JAGGAER Pay Powered by Finexio is it pays for itself, and then some. By converting legacy payment methods to single use virtual cards, rebate revenue is generated on every dollar spent. Just like the points or rebates that come with personal credit cards, businesses can earn rebate revenue share on card payments.

Card acceptance is ubiquitous in the United States, the status quo for many businesses. Using data on known suppliers who accept card payments and a dedicated supplier enablement team to run conversion campaigns, JAGGAER Pay Powered by Finexio is able to strategically grow your total card spend by seeking out suppliers you may not otherwise know would accept a card. As the number of suppliers accepting cards increases, buyers take a slice of a perpetually growing pie.

Improve Financial Position Today

Let’s look at an example. A mid-size manufacturing business may generate $100,000,000 in AP spend per year with 90,000 total count of payments. That spend converts into $180,000 in rebate revenue with only $80,000 in fees. Not even considering the soft labor and fraud savings, their legacy AP cost center now generates a $100,000 bottom line profit!

Every business can benefit from reducing the cost of payments and generating rebate revenue share, and in some cases this cash flow optimization can create strategic differentiation in capital intensive businesses. Contact us today to learn more about how to improve your financial position using JAGGAER Pay Powered by Finexio.

Citation

1 How Industry 4.0 is defining the future of business payments, Mastercard, 2022.