Payment system automation prepares Alleguard for strategic growth.

If you’ve ever relied on temperature-controlled medicine or walked away from a car accident unscathed, you may have a Nashville-based foam products manufacturer to thank.

That company, Alleguard, is known for creating strong, lightweight foam products that help keep things safe, insulated and protected. Its solutions are found in everything from car parts and construction insulation to medical packaging — and more.

The market for sustainable foam solutions is growing. With seven acquisitions through 2024, Alleguard is positioning itself to play an influential role in where it is headed next.

At an accounts payable crossroads.

Following these acquisitions, Alleguard has also focused on managing the impact of its rapid growth on its own operations, which now include 18 manufacturing centers in the U.S., Canada and Mexico. The number of invoices processed by its corporate accounting department alone increased 50% between 2020 and 2023.

By the time Tony Van Gundy joined Alleguard as controller in May 2023, the company was at a crossroads.

“It takes a certain amount of time to open the mail, enter an invoice and scan documents,” Van Gundy explains. “From an efficiency standpoint, we had reached a pinnacle and had to make a decision. Do we add more people, or do we automate?”

With plans for more strategic growth on the table, Alleguard chose the latter.

The company committed to spending 2024 overhauling its financial infrastructure, including the manual invoicing system used to pay bills for each of its seven acquisitions.

The existing process required the company’s three accounts payable (AP) clerks to enter paper invoices into six separate ledger systems before scanning and sending them to the managers around the country for approval prior to disbursement. A new system would consolidate and automate the process, from invoice to payment.

The year of automation.

Van Gundy was in the middle of reviewing accounts payable automation options when Bob Mahoney, Alleguard’s chief financial officer, mentioned a call he’d received from the local branch of Commerce Bank. They wanted to discuss AP automation.

“I shy away from salespeople,” said Van Gundy. “But Commerce’s presentation was different. They focused on facts. There was almost an instant trust factor. I knew we were going to be in good hands, and I think they would say the same thing about us.”

After comparing alternatives, Alleguard determined that the CommercePayents® AP automation solution would integrate with its existing enterprise resource planning (ERP) system with the least disruption. The AP team also liked what they heard about the CommercePayments® Payment Hub link opens in a new window, which would enable Alleguard to add a revenue-generating AP card link opens in a new window to the company’s existing payment methods.

“One of our 2024 goals was to have the AP automation implemented by the end of the third quarter, so any snags could be worked out and we’d hit the ground running in 2025,” explains Van Gundy. The question was, could Commerce have both new systems online in time to meet this ambitious deadline?

The bank’s response: Yes.

The ticking clock.

Before making the digital leap, Alleguard first had some housekeeping of its own to complete. That included rolling up the independent ledger systems of each of its seven acquisitions into one standard system and creating a workflow that would allow staff around the country to code and approve invoices electronically.

“One of the biggest selling points for AP automation was the built-in approval process,” says Van Gundy. “Our new system eliminates the endless back-and-forth emails for approvals. Now, we each get a set of invoices to approve each week, and three weeks later — like magic — they show up on the AP report. That makes life easier for plant managers and anyone responsible for invoice approvals.”

With Alleguard focused on standardizing its accounting process, Commerce turned its attention to Payment Hub, which would enable Alleguard’s suppliers to receive payments by their preferred method: virtual card, ACH, wire or check. The CommercePayments® team also began reaching out to Alleguard’s suppliers, encouraging them to enroll in the virtual card payment option.

Van Gundy acknowledges that he was initially hesitant to allow Commerce to contact the company’s suppliers directly. “But out of the hundreds of vendors they’ve reached, not one has raised a concern,” he says. “That speaks to Commerce’s professionalism in handling business from start to finish. It’s exactly what we hoped for — and exactly what we’re getting.”

The number of suppliers switching to virtual cards from other forms of payment has exceeded initial expectations. “Two months in, we had already surpassed the most aggressive model that Commerce developed on the estimated card spend volume,” says Van Gundy.

Spend volume matters, given that Alleguard earns a revenue share for every payment made using the virtual cards.

Automation benefits.

By July 2024, the Payment Hub was online, and the CommercePayments® team set their sights on AP invoice automation. Three months later, their work was essentially complete, with the new system increasing invoice efficiency by 50%.

By early 2025 — the company’s slow season — the new systems were processing about 2,000 invoices a month. Van Gundy expects that number to increase by as much as 50% as construction and other key markets enter their busy seasons. That figure could climb even further as the company’s owners identify additional opportunities for strategic growth.

“Before, we struggled to keep up with our current volume of invoices,” Van Gundy says. “This automation gives us peace of mind that we now have the infrastructure in place to integrate the next acquisitions. And we have the readily available data we need to support decision-making.”

Trust in Commerce.

Van Gundy has a few words of advice for other companies undertaking an AP automation process.

“Do your homework and look at your options because that is the right thing to do,” he says. “For me, Commerce is the answer. I’m confident that others will find that to be true as well.”

“Everyone we work with at Commerce is professional. They are willing to go in and do the work. They follow through. They do what they say they’re going to do,” Van Gundy says. “And they delivered on their end of a very aggressive deadline.”

“In their line of work, trust is everything, and you feel it almost immediately,” he adds. “At the end of the day, they’re delivering peace of mind. Who doesn’t want that?”

CommercePayments® solutions are provided by Commerce Bank.