J.P. Morgan’s Blueprint for B2B Payments Automation

The Payments Podcast by Bottomline

Episode Transcript

Owen McDonald (Host): Welcome to the Paymode edition of The Payments Podcast. I'm Bottomline managing editor Owen McDonald. This is a series of Paymode-themed podcasts looking at the hottest trends in business payments with Paul McMeekin, vice president of marketing at Bottomline, along with expert guests. In this episode, Paul welcomes Solitaire Moffett, director of implementation services at Bottomline. They look at best practices in onboarding from planning to execution.

Here's Paul McMeekin and Ken Ouimette. 

Paul McMeekin (Host 2) Hi. Welcome to another episode of The Payments Podcast in our special Paymode series. Today, joining me from J.P. Morgan is Ken Ouimette. He's the head of supplier experience and B2B payments. Welcome, Ken.

Ken Ouimette(Guest): Thanks so much for having me.

Paul McMeekin: Before we go to the questions, can you just give me a quick background of your role today and what you do with the bank?

Ken Ouimette: So I am head of our supplier experience organization and B2B payables products. That means that we have a lot going on. We have responsibility for helping our clients to optimize and monetize their payables. We have teams that are reaching out to suppliers to try and engage and get them enrolled in those preferred payment methods. On top of that, we also have a series of B2B payable-specific products that we are deploying to help meet our clients' needs.

Paul McMeekin: Excellent. Okay. So first real question. From your perspective, Ken, speaking with all of your different customers across the country, what is the hidden cost of manual process in the treasury and finance organizations?

Ken Ouimette: Yeah. There's there's quite a bit. And so many clients mentioned that the manual processes that they have often lead to a lot of time spent on low value added tasks. So, if you think about tasks like data entry or reconciliation and report generation, there's a recurring theme around those types of processes that consume a lot of energy, and are not of the greatest value addition to what a client would be wanting to work on. 

We hear an awful lot about errors as well through those manual processes. So these can come in the form of missed payments or overdrafts. Worst case scenario could be regulatory issues, and  these things crop up more often when there aren't tools and automation capabilities that are in place.

One treasurer in particular that we spoke to recently, shared that his team has experienced, and continues to, about $15,000,000 in ACH payment failures on an annualized basis. And a lot of that is often due to outdated or incorrect vendor information. Again, it's manual keying and information inside of their ERP, errors that are being incorporated as part of that process and that hold up transmissions.

Paul McMeekin: $15,000,000, you said?

Ken Ouimette: Yeah. Now that's not in cost. That's in the spend associated for those payments. But it's quite substantial when you think about that. Right?

Paul McMeekin: And it causes a bunch of rework on the back end, right?

Ken Ouimette: Absolutely.

Paul McMeekin: I cut you off your talk track there. What about risk?

Ken Ouimette: Well, that's another area that comes up an awful lot. It seems like it's coming up more and more these days. We hear about internal fraud risk that comes up on the parts of our clients, especially when approval workflows aren't automated, or maybe roles aren't as clearly defined as they need to be. And keeping vendor details current can be a challenge for a lot of teams as part of that process, and just tracking down the remittance information for vendors. That's also a source of where internal fraud can take place as well. So that is very real.

Paul McMeekin: Diving deeper into one of the areas, receivables, what's the real cost of receivables in an environment of high interest rates, traditionally, compared to the last, ten, fifteen years and fluctuating interest rates? And thinking beyond just interest rates of incentives and payment term expansion?

Ken Ouimette: There's a lot to unpack in there, and that's a really great question. I hear the opportunity cost of capital come up much more so these days than probably in previous years. We hear it in relation to when payments are delayed coming in (on the receivable side) and companies have cash that is tied up and, obviously, can't be deployed elsewhere when they're waiting for those kinds of payments. I like to say the struggle is real when it comes to thinking about working capital, and the strain that that places on customers on the receivable side.

And it's especially apparent as interest rates fluctuate, and as payment terms continue to expand. It's not unheard of at all for us to be hearing that payment terms are extending by 30 or 60 days beyond what they historically have had. And the other piece that has an impact on is that the credit risk can go up for clients the longer that receivable sits unfulfilled. So it has a lot of impacts in a lot of different ways. And I think that one of the levers that can help customers on the receivable side associated with that, is obviously thinking about ways in which they can automate accounts receivable and get those payments in faster.

Paul McMeekin: Stepping back and thinking broadly more outside of receivables, what are the KPIs that a CFO should focus on? So when you go meet with these companies, what advice do you give them?

Ken Ouimette: Obviously, there's a lot of KPIs that CFOs and treasurers are mindful of when it comes to the focus on working capital efficiency. In conversations that I've had, and that my team has had, we hear of metrics that come up that are pretty common around the cash conversion cycle. So days sales outstanding (DSO), days payable outstanding (DPO). Those come up an awful lot. One that I'd like to see - it does come up but I think that it would be one that would help companies more often - is in tracking the ratio of automated versus manual processes as a mechanism of measuring progress along the lines of improving that working capital efficiency.

Paul McMeekin: Switching topics slightly, it's a little bit more forward looking. When you're going in talking to these companies and they're starting (maybe not from scratch) but they've got some automation in place. What's the blueprint for modernizing the payments environment?

Ken Ouimette: Well I just mentioned the importance of tracking automated processes, and I think that's obviously the best way (that comes to my mind) for how you're looking at modernizing a payables environment: automating the payment life cycle inclusive of initiation through workflows and reconciliation. That, to me, seems to be a common and critical way for companies to really modernize their environment. The benefit on top of that modernization through automation is, oftentimes, it can be accompanied with payment methods that incorporate rebates as a value-add back to a client.

And, again, those KPIs that are being measured are critical to ensuring that customers that are on their modernization journey are achieving their needs or achieving that expectation. 

One other thing that I'll mention too, is that I've seen - at a pretty tactical level - customers struggle with different components of how they're managing their payables. And again, it's when automation comes into play. So we've seen companies that have had several different acquisitions, they're managing out of several different ERP systems, and they're forced to use different processes, different payment files for managing their overall payables environment. A lot of times that creates, bottlenecks or inefficiencies. Certainly it makes it more challenging for reconciliation across the whole. So it's another area where I think automation on the back-end can help to make things much more seamless, much more manageable, much more trackable.

Paul McMeekin: Yeah. That makes sense to me.
If you could give one piece of advice to CFOs, treasurers about the future of payments, what would it be?

Ken Ouimette: I really start with the importance of having clear prioritization around what is your payment strategy? And making sure that the entire organization at all levels are aligned around those priorities. So, as an example, for those that are concerned with fraud, there's interest in finding ways of verification and solutions that are going to ensure that vendor information and changes to payment profiles are as accurate as they possibly can, as verified as they possibly can. When working capital is a priority, then optimizing that payables environment is often a component of that discussion. But I think what seems to make the biggest difference is when those priorities are truly embedded throughout the organization at all levels. And my team is working with individuals, whether it's the treasurer, the head of finance, or the folks that are in accounts payable that have an overloaded plate.

It's important that everyone, at all levels, sees the bigger picture. That they have an appreciation for what the broader organization is seeking to achieve and why. I think that just makes for a much more successful implementation. And we talked about KPIs, and we talked about the importance of measuring that. And doing that at all levels of an organization helps to align the team and achieve success.

That's my advice!

Paul McMeekin: It's the classic management theory of each individual knowing where they're going!

Ken Ouimette: Yes. Exactly.

Paul McMeekin: Tying the efforts to the big strategy. 

Ken, this has been wonderful. Thank you very much, and thank you for listening to another episode of The Payments Podcast.

Ken Ouimette: My pleasure.

Owen McDonald: Discovering the true cost of receivables and the opportunity cost of capital. Reducing the strain on working capital as interest rates fluctuate. Understanding credit risk, and using various levers to help better manage B2B payables. These are all part of the blueprint for modernizing B2B payments in 2026. Our thanks to Ken Ouimette, head of supplier experience and B2B payables at J.P. Morgan, and to co-host Paul McMeekin. 

Hit subscribe. Catch us again on your favorite podcast platforms, including Apple, Spotify, iHeartRadio, and YouTube. Bye for now.
 

The Payments Podcast, from Bottomline.