Slaying The Monster

There’s no corner of banking that new digital technology doesn’t impact. Cash management is a case in point.

Pacific Mercantile Bank, a $1.3 billion-assets business banking specialist operating in Southern California, saw an opportunity to up its game by partnering with MineralTree, a fintech with web-based accounts payable and payments solutions. The company is based in Cambridge, Mass. (www.mineraltree.com).

After about six months of setup time, including testing at a beta client, the bank in May officially rolled out eConnect Pay, its cloud-based software platform that automates the entire invoice-to-payment payables process at small and mid-sized businesses.

Invoice handling automated

Paul Happach, senior vice-president and senior e-channel product manager at Pacific Mercantile Bank, says the product is unique. Most banks, he notes, offer integrated payables solutions that automate just the payments piece of the payables function at business clients. By contrast, he points out, eConnect Pay automates both payments and invoice document management and processing—invoices are digitally captured. In fact, businesses can have their vendors email invoices directly into the system.

The eConnect system integrates with existing accounting packages used by small and mid-sized businesses, Happach notes, including Quickbooks, Sage Intacct, NetSuite, Microsoft Dynamics, Xero, and others. It also links payments directly with Pacific Mercantile Bank.

Paper reduction a big plus

The eConnect product incorporates an efficient workflow solution for both invoices and payments. It will route an invoice, for example, to one or more approvers within a business based on vendor, amount, types of invoice, or other factors. Once approved, an invoice is then synced back into the accounting system, as described in two videos on the bank’s website (tinyurl.com/ PMBankeConnectPay).

When ready to pay, the authorized person selects the amount, date, and method (check, ACH, credit card), and submits. Payments can be approved from any location, and the software supports several anti-fraud controls, including segregated approval, positive pay, and two-factor authentication. Once the payment is sent, remittance details are emailed to the vendor, according to the bank’s videos.

Two clients are currently using the software. One, the beta client, is Hyperikon, an LED lighting manufacturer.

Dmitry Budanov, senior accountant of Hyperikon said in a statement that eConnectPay streamlines the invoice approval process and accounts payable cycle. He particularly cited “multiple tiers of vendor specific approval rules, automated data recognition [and] convenient search options for archived bills.”

Budanov added that Pacific Mercantile’s product integrates well with Quickbooks Enterprise, which the lighting company uses.

Happach says that feedback from Hyperikon and others indicates that the biggest advantage is reduced paperwork. Most small-business accounting departments are swamped by paper, he says.

“One client told us that when they go through their annual audit, they have to dig through the filing cabinets to find the right papers,” Happach explains. With the eConnect Pay software, they can simply use the search function to find what they need.

Pacific Mercantile Bank was opened in 1999. It is headquartered in Costa Mesa, Calif., and operates through seven locations in four Southern California counties. Cash management is a key element of the bank’s business, along with business lending. In March, it announced it had designed a customized suite of cash management services for TNT Self-Storage Management, a national company with more than 40 properties in its portfolio.

The scalable cash management program was a key factor in TNT’s decision to deepen its relationship with the bank, which, in the same announcement, said it had provided $5.6 million in financing to TNT’s proprietors for the purchase of new self-storage facilities.