- What is Vendor Insta-Pay
(or "VIP" for short)?
Vendor Insta-Pay is the following.
- It is an accounts payable service that pays your
participating vendors one-day after your
company indicates their invoices are payable.
- It does this using our money at no cost to your company.
- Your company pays us at an agreed upon time (possibly
later than you would have paid the vendors were you not using VIP).
- Why should we consider
using Vendor Insta-Pay?
Vendor Insta-Pay
benefits your company in the following ways.
- It maximizes the use of your working capital (you have
more time to use your money before it must be used to cover payables).
- It costs your company nothing to use.
- There are no due diligence or applications fees.
- It is unsecured (there are no liens on your assets).
- There are no term commitments. If your company does not
like the program, it can get out of the program quickly.
- It offers your company the option of getting a rebate
on your payables.
- It is quick to implement. It can be setup in as
little as 2 weeks.
- It reduces "When am I getting paid?" calls from your
vendors to your accounts payable department.
- It increases the likelihood that your company will get
better service from your vendors because they can concentrate on
business rather than worrying about cashflow.
- It allows companies such as
minority-owned/woman-owned/disadvantaged businesses that might not
otherwise be able to do business with your company because of the
normal payment terms offered by your company to become a valued member
of your vendor team.
- This sounds too good to be
true. How does the VIP program underwriter make money
doing this?
In
exchange for being paid in one day after their invoice is accepted we
negotiate prompt payment discounts with your vendors who "opt-in" to
the program. The
difference between the original invoiced amount and the prompt payment discount on
that amount is where the underwriter makes their money.
- Is this factoring?
No. Vendor Insta-Pay is not factoring. Our
program deals with your payables while factoring deals with your
receivables (we also have factoring programs, if you are interested in
obtaining advances on your invoices while you are waiting for payment
from your customers or third-party payors).
- Do all my vendors have to
participate?
No. The vendors you designate will have the choice to
"opt-in" to the
program. Those that do not choose to "opt-in" will continue to be
paid as they have been by your company. Those that
choose to "opt-in" will be paid via Vendor Insta-Pay in one day after
your company accepts the invoice as due and payable. Your company will
then reimburse the VIP program for the original invoiced amount on an
agreed upon payment schedule for those vendors that are paid via the
VIP program.
- Are you taking over or
eliminating my accounts payable department?
No. Your accounts payable department is not taken over or
replaced. However, it is made more efficient by having to deal
with fewer calls from vendors asking when they will be paid.
- How is my accounts payable
department affected by vendors in the VIP program?
Your accounts payable department will continue to validate that
invoices should be paid. For those vendors in the VIP program, a
payment code will be entered into your accounts payable system that
indicates that VIP will pay the vendor rather than your company.
An electronic link will be setup between your accounts payable
department and VIP to indicate when the vendor should be paid.
The payee for this vendor is changed in your accounts payable system to
be "VIP" instead of the vendor.
- What amount do the monthly
payables for my company need to be in order to qualify for the VIP
program?
The monthly amount of your payables should be at least $250,000.
The upper limit we will handle is on the order of $5 million per
month.
- If we are interested in
the VIP program, how do we get started?
In order to get started we will need the folloiwng.
- completion of a short 1-page client profile form
- your company's accounts payable aging report
- financial statements for your company
- the vendor list for your company
- If we are approved to
participate in the VIP program, what will be the next steps?
The following steps are done to setup the VIP program.
- our funding underwriter will issue a relationship
document with you
- a credit review will be done to establish the limit on
the Vendor Insta-Pay payments that can be outstanding at any time
- your company will work with the funding underwriter to
designate which of your vendors will be given the option to participate
in the VIP program
- those vendors you have designated will be given the
opportunity to "opt-in" to program using marketing materials you will
have the opportunity to approve prior to there being used
- for those vendors that have an interest to opt-in to the
program, negotiation of prompt payment discounts will take place
- execution of agreements for those vendors who choose to
join the program
- your accounts payable system will be updated to show new
payment terms and remittance address for those vendors that join the
program
- an electronic interface is setup between your accounts
payable system and the system of the VIP funding underwriter
If you have additional questions, or if you would like to learn if the
Vendor Insta-Pay program is right for your company, please
click here to contact us .
Call us now at 1-800-598-1178
to get started.
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