Payment factory

published on 18.12.2015
Payment factory

A Payment factory is an Accounts Payable (AP) structure that centralises activities and standardises processes that previously took place at a subsidiary level.

The concept of a Payment Factory comprises advisory, sales and implementation support on bank account structure, system integration, bank connectivity, reporting and smooth and secure execution of all corporates’ payments.

As a Payment Factory is a concept and not a product, a Payment Factory will differ from corporate to corporate.

Distinguishing factors are:

  • Industry
  • Corporate organisation
  • Payment methods
  • Geographical scope
  • ERP and TMS systems used
  • Preferred communication channel between Corporates and Banks
  • Cost efficiency by reduction in costs related to payments, processes, labour, funding and IT.
  • Control over Accounts Payable processes and related transactions.
  • Harmonisation and Centralisation of payment processes.
  • Cash efficiency through a faster turnover of cash within the organisation (speed-up of Cash Conversion Cycle).
  • Working Capital management by reducing the need for working capital and reducing the need for external funding (reduce Cash Conversion Cycle).
  • Accurate Cash Forecasts.
  • Visibility on cash positions.
  • Experience of a bank which has implemented over 250 payment factories in various European and Asian countries, with many different ERP systems and communication channels between corporates and banks.
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Advisory, sales and implementation support on bank account structure, system integration, bank connectivity, reporting, smooth and secure execution of all corporates’ payments. All these elements together could be labelled as a Payment Factory.