And Chris Rauen, Xign's manager of marketing communications, would happily tell any CFO that the Payless results are fairly typical for payer-centric EIPP. Companies usually spend anywhere from $8 to $20 to process and pay a paper invoice, and EIPP can cut that to about $2, he observes. But the biggest gain comes from discounts for paying quickly, which often add up to an annual return on cash in the range of 24% to 30%, Rauen claims.

So why is it the case, after years of process improvements in EIPP systems, that many–if not, most–treasury professionals still regard automated payment and billing with such hopelessness? Simply put, not every company has the clout with either its customers or suppliers that a high-volume retailer like Payless does. "If a payer has quite a bit of control over its suppliers, it can impose a payer-centric solution. And when the biller has quite a bit of control over its customers, it can impose a biller-centric solution," explains Steve Hooper, vice president and product line manager for electronic payments at Mellon Bank and co-chair of the Council for Electronic Billing and Presentment at NACHA, the Electronic Payments Association. "But when neither is the case, progress has come slowly, one company at a time." The route around this impasse for frustrated EIPP vendors? Find industries where an established network of payers and billers exists and convert them to EIPP, says Kevin Tissot, vice president for receivables business management at Citigroup, an early and aggressive EIPP advocate. "We're having our serious discussions with vertical exchanges that represent a community of buyers and sellers," Tissot explains.

According to Tissot, vertical exchanges, a favorite in the dot-com heyday, are making a comeback. While he won't identify his hot prospects, he says that they are in the global shipping and logistics space. This makes sense since one of Citi's biggest EIPP success stories is Cargo Network Services (CNS). A long-established middleman, based in Garden City, N.Y., CNS represents the commercial crossroads, so to speak, for a relatively compact and closed group of airlines and airfreight forwarders. CNS didn't have to coax billers or payers to participate; it simply converted an existing network from paper to EIPP.

Despite Tissot's enthusiasm, the market niche of vertical exchanges is somewhat thin. Hence, up until now, the key to the limited success EIPP has enjoyed is the lack of flexibility in systems to accept output in a variety of popular formats. In general, this has given the edge to payer-centric models ?? la Payless offered by vendors such as Xign and U.S. Bank's PowerTrack, notes Beth Robertson, senior analyst at Needham, Mass.-based TowerGroup, rather than biller-centric offerings that generally just deliver invoices in the billers' formats. That may be okay since automating the payment process seems to be a higher priority for most companies right now than automating billing. Web invoicing ranked just behind imaging and workflow in automation priorities, according to a survey that Charlotte-based Paystream Advisors took at a recent meeting of the International Association of Purchasing Professionals (IAPP), notes Henry Ijams, managing director. "They want to bring invoices into their automated workflow processes. There is a lot of talk now about whether to build a supplier portal for receiving invoices or join a network like Xign," he explains.

That may be changing, thanks to providers such as San Francisco-based Avolent Inc., which now sells software to billers that generates electronic invoices that can be viewed online and printed or imported by payers in their favored A/P format, ranging from EDI to Quickbooks. E-invoices can be routed to whomever needs to approve them in the payer's shop, reports Avolent CEO Doug Roberts. Payers can even see a two-year archive of past bills online, he adds.

An early adopter of the Avolent system was Delray Beach, Fla.-based Office Depot Inc. with $13 billion in annual sales. After carefully testing the system for customer acceptance and satisfaction, Office Depot rolled out the Avolent EIPP in February 2003. Some 20% of Office Depot's customers now use the high-tech system, which basically images all documents and posts them online. "They can look at images of invoices, proof of delivery, even see who signed for it," says Nancy Mackey, manager of the strategic project for billing and payment. Statements now are available any day of the month. "We don't mail out paper statements any more," she notes. Also extinct: collection calls that stall when the customer needs to see a copy of the invoice.

Since the project was rolled out in early 2003, DSO (days sales outstanding) has been cut by seven days, in part because of this project, Mackey says. What can be tied exclusively to this initiative is $1.7 million of net savings. "After July, we expect to save more than $2 million a year," Mackey says. "Besides DSO, we've reduced staff, postage, even paper envelopes. There is tremendous savings potential for both us and our customers," she declares. It's not the perfect solution–yet. Because it is based on Web site visits, not a computer-to-computer interface, Office Depot's largest customers rarely use it, Mackey concedes. But it is a big step toward supply chain automation. That 20% adoption means that by June, the company had already reached its goal for year-end 2004. "I think we'll be closer to 30%," Mackey predicts. Acceptance has been tremendous. We understand that EIPP adoption in the first couple years usually runs between 1% and 7%."

GETTING SYSTEMS TO COOPERATE

But while Office Depot's clients may be lapping it up, other companies seem stuck in the mud on EIPP. Still, many vendors–particularly the banks–remain bullish. Traditionally, two events were visible to the biller: when the invoice was sent and when the check arrived, notes Saw Hooi Him, head of EIPP for Deutsche Bank's global cash management unit, Every step happening in between, he says, was invisible. EIPP opens a huge window on that process and lets both parties plan, investigate, communicate, resolve and execute online, Saw explains. How can that not be a benefit that every businessperson wouldn't eventually want and need?

Down the road, biller-centric and payer-centric systems will build links, so that their systems can exchange documents without requiring individual mapping, predicts TowerGroup's Robertson. "The need for individual mapping has led some vendors to take a broader view and start a move toward facilitating integration and document exchange between trading partners using different solutions," she observes. "This lets both parties leverage the value of their internal solutions. The end game is an open exchange for parties using different solution types."