The waste management industry is in the midst of a historic consolidation wave. Throughout the country, established companies are acquiring smaller competitors, private equity firms are writing billion-dollar checks, and the industry’s largest operators are reshaping their approaches through large-scale mergers.
Last year, Waste Management’s massive $7.2 billion acquisition of Stericycle grabbed attention, but it was just the tip of the iceberg in a year that would be filled with big deals. In fact, major publicly traded waste companies spent an estimated $10.9 billion on acquisitions in 2024, more than doubling the $4.2 billion spent in 2023. Why? For the first time, the U.S. waste and recycling industry surpassed $100 billion in revenue, making it an increasingly attractive target for investors.
But what does this mean for you?
While executives focus on market expansion, the real operational challenges of mergers and acquisitions (M&A) tend to show up in the back office in accounts payable (A/P). Specifically, one of the biggest challenges is handling account number changes, which can disrupt payment processes, reporting, and customer relationships. This blog post outlines the best practices for managing accounts payable and protecting your financial outcomes during vendor mergers.
Understanding the Impact of Vendor Mergers on Accounts Payable
When vendors go through a merger or acquisition, the resulting changes to their systems and processes can disrupt the entire accounts payable operation, causing:
- Account Number Changes: The acquiring company may assign new vendor account numbers to align with their existing numbering system or enterprise resource planning (ERP) structure. This requires comprehensive updates in the A/P system.
- Payment Disruptions: Mismatched or outdated account numbers can delay payments or result in misapplied funds, particularly when customers’ automated payment systems continue processing transactions using legacy account information.
- Data Integration Challenges: Combining vendor data from different systems may create discrepancies in payment terms, outstanding balances, or credit limits. Historical payment patterns and customer preferences may also be lost during system migrations, affecting collection strategies and cash flow forecasting.
- Customer Communication Gaps: Without clear, timely, and consistent communication, customers may send payments to incorrect accounts, delay payments due to confusion about new procedures, or become frustrated with conflicting instructions from different departments within the newly merged organization.
How An Outsourced Partner Can Help Manage These Transitions
Managing accounts payable during vendor M&A transitions requires specialized expertise and dedicated resources that many companies lack internally. The following are just a few benefits of using an outsourced partner:
1. Establish Clear Communication
Think of an outsourced partner as your dedicated point person during vendor M&A chaos. While vendor contacts are juggling integration tasks, your partner maintains steady communication, schedules regular touchpoints with their finance teams, and keeps tabs on any account changes that could affect your cash flow. They also streamline internal communication, ensuring your A/P, finance, and operations teams get the updates and action items they need without the usual confusion.
2. Update Your A/P System
The right partner brings technical know-how and proven processes for handling system changes. They can swap out account numbers, redirect payments, tweak matching rules, and update vendor files without disrupting your day-to-day operations. For example, once they receive written confirmation from the vendor about new account numbers or payment details and cross-check those details with the vendor’s official documentation to avoid errors, they can enter the new account numbers into your A/P system and map them to existing vendor records. They’ll also keep a detailed record of all communications.
3. Reconcile Accounts
Outsourced partners can handle complicated reconcilitation processes, including monitoring transitional payments, catching misapplied funds, and confirming balances with new vendor systems. They keep comprehensive payment records during transitions and work closely with vendor finance teams to resolve issues efficiently.
4. Monitor Payment Processes
Payment processes become complex during vendor transitions, and the extra oversight required can stretch internal teams thin. A good partner handles the heavy monitoring with better tracking systems and early warning alerts for payment problems. They closely watch cash application processes and quickly escalate issues, stopping minor glitches from becoming major cash flow problems.
5. Leverage Automation Tools
Established partners bring proven automation platforms specifically designed to handle complex payment scenarios and vendor transitions. These tools automatically route payments based on various factors, flag potential issues, and provide real-time visibility into payment status.
6. Maintain Customer Relationships
An experienced partner provides dedicated customer support focused specifically on managing vendor transition issues. They establish clear communication with customers, handle concerns about billing or payment changes, and share expertise to minimize relationship disruptions.
Industry consolidation isn’t slowing down, and as companies adapt to new technologies and regulations, managing accounts payable through vendor M&A has become a key business skill. The right partnership helps companies maintain steady cash flow, reduce internal workload, and preserve the vendor relationships that matter most to their success. Contact Cass Waste Invoice Management for a complimentary, detailed evaluation and review of your current processes to identify potential immediate savings and risk mitigation.
About Cass
Our Invoice Management Solution (IMS) provides four core services: (1) acquires critical data from multiple documents, (2) manages the data acquired, (3) provides business intelligence for internal and external stakeholders, and (4) offers a financial exchange for timely and efficient vendor payments, addressing liquidity and cash management goals.
Leveraging our proprietary technology, WasteVision™, we provide a more informed, efficient process that focuses on reducing costs and relieving your burdens. Our passion for this work, and our reputation for client satisfaction, provide us with the opportunity to work with hundreds of the world’s largest organizations.
Contact us to learn more about how we can help you reduce or even eliminate these challenges today to get on a path to a more efficient, sustainable tomorrow.
