Globalization and the International AP Payment Process

By Anthony F. Loiacono, President of Sales and Marketing, Global Exchange Group

The past several years have seen law firms of all sizes looking for new opportunities across borders. In 2013, Georgetown Law's Center for the Study of the Legal Profession reported more than 90 cross-border mergers in 2012 and the opening of more than 50 foreign offices by U. S. firms in Europe, the Middle East, Asia, Latin America, Africa, and the Caribbean. While international growth has slowed through 2013, firms continue to follow their clients and watch potential overseas markets closely for expansion possibilities. The success and growth of these firms, who are already facing cost control and competition challenges, should not be impacted by a paper-based AP process and the cost and complexity of making and receiving international payments.

Navigating the Intricacies of the FX Market

Law firms establishing a footprint in other countries will find themselves operating in a new financial landscape, one which holds real challenges for the back office accounts payable team. While globalization brings new options to expand a firm’s reach and service to clients, it also taxes internal resources that may already have too many projects and too little time. For example, the process of moving money from one country to another and between currencies is a central consideration when you’re doing business internationally. The foreign exchange market is open 24 hours a day, 6 days a week. Because it operates in multiple time zones, it can be accessed at almost any time. This means that, in every country where you do business, your firm is continually exposed to the FX market’s currency fluctuations and changes. The amount of work required to stay on top of these changes is significant, resulting in new demands on company time and operating costs. AP departments are not usually staffed to deal with the intricacies of foreign exchange and international payments, which encroaches on the time and personnel necessary to maintain core departmental functions. Added to that is the burden of ensuring that regulatory compliance requirements are met for your international transactions, which further erodes employee time and drives up costs . Pulling all that disparate data together into meaningful reports is a tedious undertaking that  takes time and resources away from essential department functions.

The AP business process also presents challenges, especially in terms of back office functions, which are often the last place firms look to automate what is today a paper-intensive and complicated process. There is little argument that paper-bound workflows are clumsy and hard to track. Finding key documents or even keeping an accurate paper trail can consume time and resources, slowing down processing and increasing the risk of errors. The inability to reconcile accounts reliably with payments or to handle exceptions quickly has a negative impact on client or vendor relations and can affect your ability to accurately project and manage cash outflow. Because expanding internationally will add to the challenges your AP department is facing, it is a good time to assess your business process to make it more efficient, less people-and-paper intensive, and less costly.

Combining AP Automation with an International Payment Provider

Given the international challenges, many firms are looking to AP Business Process Management software and international payment providers to improve AP workflow and efficiency, manage their currency exchange requirements, and help them take advantage of the most favorable exchange rates. There are tools in the market today that can deliver these improvements to your AP workflow and help AP departments easily handle international and domestic payments while reducing operational costs and risks. The market offers several options to address AP business process and workflow automation. These options include features like integration with your financial management and ERP systems, “touchless” processing direct from your supplier, document recognition and scanning, e-invoicing, and approval routing and notification via desktop, tablet, or mobile device.

You can select full service automation solutions in a variety of forms: by implementing an in-house financial or ERP software system,  by working with an outsource partner for AP and integrated online international payments processing, or through an arrangement with a software-as-a-service (SAAS) provider. Some firms have adopted an integrated approach, with a workflow-driven financial or ERP system and an online international payments provider. Whatever your approach, the result should be an end-to-end solution with a single workflow that processes the invoice from initial request to payment, and sorts, extracts, and stores multiple fields in your firm’s internal data repositories as needed.


AP automation, combined with an online international payments provider, is a good investment for the global law firm. You’ll gain better control and visibility over the entire payment process. You will realize faster, more accurate payments, transparency into all transactions and their cost and status, single-entry data that is integrated at all common points, and increased capture rates for early payment discounts and favorable exchange conversions.

One of the key barometers to AP workflow efficiency is the cost to process an invoice. In a 2013 Aberdeen e-Payables: Payment Automation for Operational Excellence study, best in class companies, with fully integrated AP automation solutions, were reported to enjoy a cost per invoice of $4. Compare this to the results for all others (with partial or no AP automation), at a cost per invoice ranging from $9.60 to $23.30. You can see that automating payables can mean an available savings, for 10,000 invoices, of $56,000 or more. From this statistic alone, a business case for AP automation practically builds itself. For the international law firm, other benefits include:

  • Increased visibility to manage priorities, accelerate recognition of liabilities, and focus on positive cash impact
  • Capitalizing on most favorable exchange rates for international payments
  • Built-in internal controls and compliance with regulatory requirements
  • Reduced processing and labor costs
  • Better spend management and capture of early payment discounts
  • Reduction in duplicates, errors, and time to process
  • Increased operational flexibility
  • Reducing paper on a large scale basis

Accounts payable and the international payments process offer some of the best opportunities for an immediate impact on your firm’s operations, whether yours is a domestic practice or you already have a cross-border presence. These are challenging times for law firms and their management teams. Understanding the challenges and being positioned to meet them will make the globalization process that much more rewarding.

Global Exchange Group

Global Exchange Group is a foreign exchange and international payments provider dedicated solely to cost effective business-to-business payment processing. Our customizable solutions include end-to-end international payment processing and outsourcing and management of accounts payable, both domestic and international. Our outsourcing AP services include:

  • International and domestic invoices
  • Direct-from-invoice processing, imaging, and storage
  • No depository requirements or contracts
  • Easy international payments and settlements
  • Line of credit solutions
  • No multiple banking requirements, contracts, high fees, or minimum deposits

Global Exchange Group

Global Exchange Group provides law firms with the ability to simplify the complex tasks of international payment processing, accounts payable, and automated payables solutions. Producing increased organization-wide efficiencies, Global Exchange facilitates seamless integration with firm's Thomson Reuters Eliteā„¢ and other financial management systems; while providing comprehensive reporting functionality.

Celebrating its 20th year, and currently serving over 140 law firms, Global Exchange offers organizations several advantages, which include: processing direct from invoices, checking for duplicate payments, data validation, and automatic sending of remittance invoices to beneficiaries; with no contracts, minimum deposit requirements or any such encumbrances. Click here to learn more.

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