Arends Hogan Walker — a farm equipment dealership that now runs more efficiently

When John Deere launches its first fully autonomous tractor later this year, the self-driving machine will be able to plant or harvest crops — and more — day and night. Meanwhile, farmers can go about their business, monitoring the tractor’s progress remotely on their phone.

These “smart” tractors are the latest in a series of innovations that allow the agricultural community to free up labor, boost output, reduce waste and improve overall efficiency.

A technological transformation with similar goals is also underway at Arends Hogan Walker (AHW), a large John Deere dealership based in Champaign, Ill. But instead of using technology to plant seeds with pinpoint accuracy or collect crop health data, AHW is using it to automate its payments system and other internal processes that link its operations across eastern central Illinois and western Indiana.

“Two years ago, we were still using a lot of paper,” says Zach Fisher, accounts payable manager for the 500-person company. AHW’s Accounts Payable team processed — and their CEO signed — 250 to 500 checks a week, and the company’s cumbersome manual invoice approval process prevented it from taking advantage of many early payment discount opportunities.

“We knew we could save significant time and money by transitioning to a digital operation,” says Fisher. “And Commerce Bank’s Payment Hub was a great way to jumpstart the process.”

Commerce Bank has served as AHW’s primary bank since 2012. During that time, its bankers have helped arrange financing for multiple acquisitions and provided deposit, credit, investment sweeps and other financial services to the growing operation. In 2021, Commerce recommended a virtual payment hub to reduce the growing number of checks the dealership was writing.

The start of something bigger.

Before making the digital leap, however, AHW had to first update some of its existing internal processes. That included implementing a paperless document library and creating a workflow that allows staff in each of the company’s 20 locations to code and approve invoices electronically.

“We needed to make these changes anyway,” says Fisher. “The Commerce Payment Hub just gave us the perfect reason to get started.”

Meanwhile, Commerce began reaching out to the dealership’s 5,000 suppliers to identify their preferred method of payment. To this day, the bank submits a weekly report to AHW on its progress. When given a choice, most suppliers opt to be paid by either ACH or a virtual credit card. Most of the remainder are paid by paper checks issued directly by the bank.

The dramatic decline in paper checks processed in-house is just one of the ways AHW benefits from its new payment system, Fisher says. ACH payments enable the dealership to take more early payment discounts, while payments made using a virtual credit card earn the dealership a revenue share.

“Our virtual payment system has created a new revenue stream,” says Fisher. “We are netting a couple of thousands of dollars a month, even after paying for the payment hub service.”

The new virtual payments system saves more than time and money, says Brett Penick, AHW Controller. “Commerce presented a solution that has opened other doors for us.”

“By moving our payments to the Payment Hub, we have freed up the time our staff needed to automate other manual processes and implement new initiatives.”

Zach Fisher, Accounts Payable Manager

That includes making better use of the dealership’s ERP (Enterprise Resource Management Tools). Another project involved adding Commerce credit cards to its accounts payable library, enabling staff to upload their credit card receipts into the dealership’s accounting system.

The benefits of these digital changes ripple through the organization, says Penick.

“We have an audit coming up,” he explains. “The auditors wanted documentation to back up our payments. This year, Zach could pull everything they need right from our data library. It’s a slick and easy process.”

“It helps that our bankers understand our business,” adds Penick. “Commerce is a true partner. They’re always ready with solutions that make us a stronger company.”

Also See:

• A payment solution that gives back
• Fine-tuning the cash conversion cycle to optimize working capital