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Electronic accounts payable (EAP) has come a long way in a few short years. Referred to as virtual cards, ePayables, single-use accounts and other terms, EAP is defined as a non-plastic commercial card account used to pay for goods and services after an invoice has been received. By streamlining payments processing, reducing reliance on checks, improving working capital and enhancing risk controls, EAP is making significant contributions to organizations in both the private and public sectors.

Whether you are thinking about implementing EAP at your organization or seeking to expand an existing program, being current on market trends and best practices can help you optimize and grow your EAP spending.

EAP Value to Users

Organizations of all types can realize the benefits of EAP, including:

  • Reduced reliance on checks
  • Improved financial position and working capital
  • Enhanced organizational processes
  • Strengthened fraud control
  • Increased spending and transparency

Market Trends

The 2018 Electronic Accounts Payable Benchmark Survey by the research firm RPMG Research Corporation, provides significant insight and perspective into how EAP programs have evolved, continue to grow and are projected to expand at an even faster pace over the next few years.

EAP spending: growth, mix and transaction size

Overall, annual EAP spending grew at a 10.9% average annual rate between 2015 and 2018, with corporations rising by an average of 12.4% per year and government and non-profit organizations increasing an annual average of 6.4%.

EAP programs can accommodate a variety of spending types and categories, as underscored in the diversity of spending types in the Distribution of EAP Spending graph.

Of particular note is that 32% of an organization’s EAP spending has been focused on operating expenses such as general maintenance, shop or office supplies and technology. The second largest EAP spending category (21%) among organizations has been for assets such as inventory and infrastructure. Evaluating your current spend mix is an important consideration when establishing your EAP program and will be reviewed in more detail in the Best Practices section.

Spending Projected to Steadily Rise

The outlook for EAP spending is one of steady, sustained growth, according to survey respondents. EAP spending rose over 55% from 2013 to 2017 and is projected to experience a cumulative increase over 2017 of 23.9% by the end of 2020 and 42.9% through 2022. Spending can be a mix of low-dollar, high-frequency transactions or can also be associated with large-ticket spend.

Cumulative Increase in EAP Spending Over 2017 Levels 2018 – 2022

RPMG’s 2018 Electronic Accounts Payable Benchmark Survey also provided insights on the outlook for EAP spending based on the age of an organization’s EAP program and the type of organization.

Age of EAP Program:

As expected, the projected growth rate of EAP spending is faster for organizations that have relatively new programs compared with more seasoned operations. Younger EAP programs (defined as less than three years) are projected to increase by 9.6% in 2018 over 2017 and by 58% cumulatively by 2022, while older EAP programs expect slower growth of 6.5% in 2018 over 2017 to 36.8% cumulatively by 2022.

Type of Organization:

Historically, EAP spending by corporations has grown at a faster rate than at governmental and non-profit organizations. Corporate EAP spending is expected to continue to have an edge, with a cumulative increase in spending of 44.5% from 2018 to 2022 compared with a rise of 41.0% for governmental and non-profit organizations.

Reasons for EAP Growth Expectations

  • Increased supplier acceptance
  • Anticipated efforts to target commodities
  • Focus on high-dollar transactions
  • Increase in organizational revenue/budget

Establishing and Optimizing Your EAP Program: Best Practices

RPMG estimates market potential for EAP spending to be $1.2 trillion, based on the current state of adoption. Growth in potential is not being driven solely by new adopters: Existing users estimate the potential for EAP spending to be nearly four-fold over their current spending levels.

By reviewing the policies and processes of the most successful EAP users – the Best Practices organizations – you can apply the principles that are highly correlated with the value delivered by EAP directly in your organization from the onset of your program.

Pillars of Success

There are three critical areas on which to focus when establishing your EAP program. By following the best practices we have outlined in each of our pillars of success, you and your team will be well prepared at the outset of your EAP program and will quickly realize the benefits it offers to your organization.

I. Maximizing Cross-organizational Support

Organizational support is crucial to the success of your EAP program. Best Practices organizations create a high level of awareness throughout the enterprise, including executive-level communications and ongoing demonstration of support. In addition, high-performing organizations make a strong and visible commitment of resources to EAP development and growth coupled with extensive training and adoption of the program. By starting with your executives and then identifying key stakeholders in departments aligned with the program’s success, you will create a clear line of visibility, ownership and support from the very start of the project.

Best Practices organizations establish rigorous internal audit disciplines and review the EAP spend approval processes annually (at a minimum) in addition to performing a comprehensive risk management assessment. These users are constantly looking for ways to stay informed about industry developments and strengthen their EAP program, including sending their EAP administrators to user conferences.

II. Defining your Vendor Strategy

Gaining widespread supplier acceptance of EAP is another essential element in your EAP program’s success. Suppliers are often not aware of the value that you place on EAP and how significantly it impacts your preference to do business with suppliers that accept EAP payment. To achieve your EAP goals, you must have a welldesigned strategy devoted to directly engaging vendors and helping them realize the benefits of EAP acceptance.

Best Practices organizations standardize terms for payments and contracts and use faster payment with EAP and incentives to encourage acceptance. When possible, they include an EAP acceptance requirement in RFPs or renewal contracts. These organizations revisit discussions with suppliers that initially refuse EAP payment at least annually, and they respond with support by the bank provider to suppliers that indicate that they want to stop accepting EAP. Importantly, Best Practices organizations are willing to direct purchases to EAP-accepting suppliers over others and switch suppliers due to lack of EAP acceptance.

III. Working with your Financial Institution to Evaluate Program Success

Gaining widespread supplier acceptance of EAP is another essential element in your EAP program’s success. Best Practices organizations also work closely with their EAP-providing financial institution to help realize their spending potential and maximize usage.

While most organizations use metrics to evaluate their own performance, far fewer benchmark their EAP spending against peer organizations. The benefits of benchmarking your organization with others helps you identify opportunities for strengthening your program. According to RPMG research, organizations that benchmark their EAP spending report significantly higher average monthly EAP spending, transaction amounts and percentage of the supplier base paid with EAP. Compared with users that do not benchmark data, these organizations are more likely to report growth of EAP spending over the past three years at a notably higher rate and have greater expectations for future EAP spending growth.

Realizing your EAP Spending Potential

EAP usage has grown dramatically over the last few years, and there are even more benefits to be realized in the future. Ensuring that you realize the full potential offered by EAP involves: 

  • Capitalizing on the opportunity for EAP growth in your current payments mix 
  • Working closely with your executive team and defining a vendor strategy 
  • Engaging with your financial institution to identify and implement ways to realize your spending potential

Let’s talk about your business.

For more information on how KeyBank can help you optimize your EAP program, visit or contact your Payment Advisor today.