accounts payments
US financial services group JPMorgan Chase (JPMC) has launched AP
Trac, an electronic, card-based settlement service designed to
enable companies to replace the paper cheques used for their
accounts payable transactions. With AP Trac, companies can settle
approved invoices over a commercial card network in a manner
similar to straight-through automated clearing house
processing.
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“As more than 80 percent of business-to-business payments are
settled with traditional cheques, accounts payable departments are
increasingly seeking a seamless transition to electronic payment
and remittance delivery,” said Richard Erario, JPMC’s senior vice-
president for commercial card and electronic procurement, invoicing
and payables.
A key feature of AP Trac, which ensures control and facilitates
reconciliation in the accounts payable process, is the use of
JPMC’s ExacTrac single-use card functionality. With ExacTrac, each
payment is assigned a unique card number with authorisation
controls specific to that payment transaction.
In addition, throughout the settlement process both parties to the
transaction can see the status of payments and historical records
via the internet-based portal of the Xign Order-to-Pay solution.
Payments can be tracked and managed via the portal for better
forecasting and cash-flow predictability, said JPMC. The Xign
Order-to-Pay solution was developed by Xign, a software vendor
acquired by JPMC in May.
A significant attraction of JPMC’s AP Trac service is likely to be
that if a buyer does not have the funds required to secure early
payment discounts from suppliers, JPMC will advance funds on behalf
of the payer and then settle with them up to 30 days later.
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By GlobalDataExacTrac has received a strong endorsement from payments
consultancy PayStream Advisors. JPMC has responded to “a giant
market opportunity”, said William Donavan, PayStream Advisors’
communications and marketing manager. “AP Trac, combined with
ExacTrac, looks set to give finance and accounts payable managers
the control they need to move to ePayments, while making financing
and discount capture a reality in a way it had not been before.
This is an exciting turn of events.”
