Improve Efficiency and Working Capital
Help increase Days Payable Outstanding (DPO) for your business and decrease Days Sales Outstanding (DSO) for your suppliers by consolidating payments to suppliers into one digital platform.
American Express® Buyer Initiated Payments is a digital payment solution that lets buyers quickly and efficiently schedule payments to suppliers. BIP can integrate into your Enterprise Resource Planning (ERP) software without disrupting existing Accounts Payable (AP) processes.
The Challenge: A wholesaler, following standard industry practices, offered longer payment terms to its customers than those offered by its suppliers. As a result, cash was going out more quickly than it was coming in and they were unable to purchase optimum levels of stock for their customers without incurring hefty interest rates.
The Solution: By making use of American Express BIP, the wholesaler was able to take advantage of process efficiencies as both a buyer and seller.
As a buyer, they’ve increased their Days Payable Outstanding (DPO), resulting in optimized working capital. As a seller, they’ve taken advantage of earlier payments from customers. BIP’s electronic bill payments solution allows them to receive payments in as early as three days after the customer authorizes them, which is faster than conventional invoice terms and still allows their customer to pay only when the statement is due.
In this case, the wholesaler benefits from enhanced supplier relationships, as BIP enables them to pay their own suppliers more promptly than most traditional invoicing processes, while still increasing DPO on their end.
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