If you look at a list of companies that have launched Electronic Statement Presentment (ESP) or Electronic Invoice/Bill Presentment and Payment (EI/BPP) capabilities, you'll see dozens of the largest and most prestigious financial and consumer-oriented firms in North America.

Indeed, the list includes Aetna, American Express, Fleet Bank, Sears, US Bank and reads much like a Who's Who in American Business.

But noticeably absent are thousands of small and medium-sized enterprises (SMEs). These companies are often just as aggressive and innovative as the giants, but simply lack the internal staff or infrastructure needed to implement new information-based technologies cost effectively.

That's about to change, however, thanks to the launch of a new business dedicated exclusively to helping small and medium sized firms -- even those involved in business-to-business dealings only -- implement the popular ESP/EBPP/EIPP technology.

Called Transend Business Services, the new firm is the brainchild of Brent Luckman, an entrepreneur who specializes in exploiting emerging trends in Information Technology.

Streamlining Business Processes
The specific opportunity Transend and Pitney Bowes are capitalizing on involves helping small and medium-sized businesses streamline internal work processes and lower costs by automating and integrating all forms of routine business transactions -- including all forms of paper and electronic customer and supplier messaging, billing and payment activities.

"We were intrigued by the recent rapid growth of electronic payments and the fact that SMEs were not participating fully in that growth," explains Luckman, who has developed more than 20 software products in his career including industry standards such as Landmark Benchmark and Uninstaller. For example, the U.S. Federal Reserve Bank recently reported that use of paper-based checks has declined by nearly 25 percent, from an annual total of about 65 billion checks in 1979 to less than 50 billion checks in 2000.

The Bank further estimates that paper checks currently comprise only about 60 percent of all payments made in the U.S., which is down significantly from the 85 percent share they held in 1979.

The remaining payments -- an estimated 30 billion a year -- are now made electronically in the form of credit/debit cards and Automated Clearing House (ACH)/Electronic Funds Transfer (EFT) transactions.

Yet until very recently, much of the shift to digital transactions and payments involved Electronic Data Interchange (EDI) activities among financial institutions and between major businesses and their suppliers.

And the lion's share of the EDI transactions between business partners occurred only among the very largest firms and their most sophisticated suppliers and customers, he says. "By some estimates, only 20 percent of a major firm's complete supply chain participate in EDI transactions," he explains. "That's mainly because smaller trading partners lack sufficient internal resources to implement the technology, or the transaction volume needed to justify the relatively high cost of an EDI implementation."

Simple Yet Comprehensive
For Luckman, the opportunity was clear. SMEs urgently needed a way to catch-up with their larger competitors and partners when it came to electronic invoicing and payment processes, if for no other reason then to remain viable in a business environment that increasingly relies on advanced technology.

Plus, the SME market is particularly fertile. According to U.S. and Canadian census figures, there are more than eight million businesses in the U.S. and Canada with 500 or fewer employees.

However, to be fully effective, any solution needed to be both simple to implement and fully comprehensive in its scope. Specifically, he determined that the solution must encompass and integrate all the existing but often separate manual and automated work processes. These include:

• Existing EDI platforms;
  
• All pertinent internal data processing and accounting systems supporting accounts receivable (a/r), accounts payable (a/p), and all purchase order and change order activities; and
  
• Linkages with both U.S. and Canadian banks as well as seamless connections with a full array of international financial institutions.

Additionally, the solution required a 'many-to-many' web-based operating environment, which would easily accommodate multiple, even an unlimited number of buyers, suppliers and financial institutions.

A pretty tall order by any measure, but one that was met via a unique collaboration with Pitney Bowes and its innovative and robust D3™ technology. D3 is ideally suited to the full range of customer messaging (or a/r-related) activities, including remittance and payment processing, dispute management, and analytics. In fact, Transend holds the only master license agreement in North America to sublicense the full array of D3's advanced processing modules.

By way of comparison, Transend's own document presentment engine is especially well-suited to the automated import/export and transport of data, documents and payment information associated with the a/p or supplier-related work processes. Plus, it excels at establishing seamless linkages via the popular accounting software packages with various banking institutions.

Furthermore, the Transend solution is being offered as an easy-to-implement 'managed services' business model, rather than the more common 'applications services' model.

A managed service model reduces complexity for users by allowing for the extraction of data and the processing of that data at a secure third party site. This approach helps speed and reduce the cost of implementation, which enables users to capture the savings from faster processing and the reduced cost of invoicing and messaging almost immediately.

"Regardless of broad economic trends or individual company circumstances, every business needs to lower costs, streamline internal work procedures and strengthen linkages with customers and suppliers," says Luckman.

Businesses typically look to new technology to achieve these goals, he adds, but in too many instances the new technology "simply overlays additional and unnecessary complexity. Our solution addresses all three key priorities for businesses and features a simple, out-of-the-box implementation that interfaces seamlessly with existing accounting software."

As proof, Luckman points out that the Transend solution is fully compatible with 15 of the leading accounting software packages currently used by small and mid-sized firms.

And to assure full compatibility with banks, Transend even created a proprietary Universal Payment System that features a common infrastructure and provides payment processing and consolidation services that supports all Canadian financial institutions, as well as the major U.S. and international payment systems.As a result, Transend can streamline and facilitate transactions among partners virtually anywhere in the world.

Lower Costs, Less Work, Better Cash Flow
Of course, the potential hard-dollar cost savings will vary from user to user, depending on the work processes already in place and the volumes involved. But Luckman estimates the typical savings per transaction will be roughly 50 percent due to reduced costs for postage, materials and labor.

Similarly, any improvements in efficiency or productivity due to faster processing and compressed cycling time will also vary according to the user's circumstances. But again, Luckman believes most users can anticipate compressing processing time by about a third.

Aside from the cost savings and the streamlined work processes -- which are significant alone and make the Transend solution attractive -- the solution also provides a real-time, on-line system for managing customer profiles and tracking data.

As a result, it provides 'C-Level' executives with an unprecedented view of the real-time status of both A/R and a/p data, along with the ability to use that data to better balance payments with receivables, maximize cash flow and help boost profitability.

And if business managers are unsure about the need to implement the new technology, all they need do is ask their banker or other trusted financial advisor. Some of the leading banks in Canada are already reviewing how best to provide the Transend capability to their own customers on a private or white label basis.

Of course, the banks are motivated out of a desire to lower their own costs and streamline their own internal work processes by reducing the handling of paper checks.

Return to List of Articles