Using Ramp vs. Melio for Accounts Payable

Note: This article references my personal experiences using Ramp vs. Melio in conjunction with QuickBooks Online (QBO) for accounts payable. Other situations may differ. This is not a full review of Ramp A/P. It is a case study in what happened when we tried to preserve a QBO-centric A/P workflow while replacing Melio with Ramp as the payment platform.

I began using Ramp last fall for a client who wanted to use Ramp virtual cards. The client soon requested that we also adopt Ramp for accounts payable for our recurring outside services vendors. We were using Melio for accounts payable and considered that Ramp could be a one-stop shop to replace Melio.

We have now been using Ramp for A/P for about a month now, and the switchover has been painful. My main observation: my client’s particular workflow is not well-suited for Ramp A/P.

Since my client’s workflow is key to this analysis, let me describe how it works.

QBO-Melio A/P workflow

I call this the “QBO-Centric Workflow” because 90% of the work is performed inside of QBO. The last 10% is paying the bill in Melio.

1. Set up new Outside Services Vendor(s) in QBO using data received on a W-9 form.

2. Enter info about the Vendor’s service agreement in the vendor’s “Notes” field in QBO, namely the term of the service agreement and the amount the vendor will be billing each month.

3. Vendor sends their monthly invoice (aka their bill, using QuickBooks parlance) to my client’s finance@[companyname].com email, and the vendor cc’s the manager at my client’s company, who will be approving their bill.

4. Enter the bill directly into QBO, and attach a .pdf of the bill. Review the Notes field in the Vendor record to confirm a) the service agreement is current and b) the invoice amount matches the service agreement. If there are discrepancies, I alert the approving manager of the anomaly.

5. The client’s approving manager approves the bill (via email to me), and then I use Melio to pay the bill.

6. Melio syncs a bill payment to QBO, and the bill 'disappears' from the QBO A/P report.

Ramp A/P workflow

In the Ramp workflow, vendor bills are entered directly into Ramp. The QBO vendor list can be synced over from QBO, or new vendors can be created directly in Ramp. Vendors can email their bill directly to Ramp using a customer-specific Ramp email address, or a Ramp user can drag and drop a bill into a Ramp bill entry screen.

Bills are then paid in Ramp. Approval workflows can be configured as well if there is a division of labor, such as a data entry clerk and an approving manager (both must be Ramp users).

Note: We did not adopt the Ramp A/P workflow—we are using the QBO-centric workflow, but are now using Ramp to pay the bill instead of Melio.

Why are we maintaining the QBO-Centric workflow?

Reasonable question: Why are we maintaining the QBO-centric workflow instead of adopting the Ramp workflow? Here are our reasons:

1. We are using information in the QBO Notes field (as noted above) to validate bills received. If the Vendor’s Service Agreement is current and if the Bill is for the monthly contracted amount, the bookkeeper is pre-authorized to enter and pay the Bill.

2. We are not giving approving managers access to Ramp to review and approve bills, because we don’t want to introduce one more app/one more task to the company managers’ to-do list. And we don’t want to pay a Ramp user fee for every approving manager.

So, since we have not adopted the Ramp A/P workflow, here's the problem: Bills do not immediately sync from QBO to Ramp as they do with Melio—there is a marked delay.

When I inquired about this delay to Ramp Support, I received this reply:

“Ramp’s QBO bill import is not real-time, so bills won’t typically appear in Ramp within a few minutes of being created in QBO. A reasonable expectation is:

• Usually: bills show up within 30–60 minutes

• Safe expectation: allow up to a few hours

• If it’s still not there by ~24 hours (next day): that would be outside the normal window, and we should investigate.”

That’s a sharp difference between the almost-instant sync from QBO to Melio!

On the other end, after paying a bill in Ramp, the reverse is true – the Bill Payment does not immediately sync from Ramp back to QBO. Again, compared to Melio, for which the sync is almost immediate, the Ramp sync is disappointingly slow. Ramp Support told me this:

“When a bill shows as 'Initiated' in Ramp with an estimated arrival date (like Apr 10), it means the payment has started but hasn’t completed yet. Because of that, QuickBooks won’t show it as Paid right away.

To clarify, the bill will show as paid after the debit to your bank account has settled on our end, not when it’s initiated.

Since you use bank feed matching in QBO:

• ACH: shows as paid once it hits your bank feed (usually 1–2 business days)

• Checks: only shows as paid after the check is cashed.”

As a consequence, the QBO Accounts Payable report (aka “Unpaid Bills” report) is no longer reliable, since Bills which may have been paid in Ramp can have a two-day lag time before they appear as paid in QBO.

In contrast, Melio works differently: when you pay a bill in Melio, it is marked as Paid in QBO immediately and disappears from the A/P report. When bill payments clear the bank, they appear in the bank feed and show as a Match to the paid bill.

I will acknowledge that if Ramp users open a Ramp Business Account, also known as a Ramp Treasury account, whereby funds are banked at Ramp and used to pay bills (and yes, it is an interest-earning account), then same-day ACH payments are offered at no additional charge, provided bills are paid before the specified cut-off time.

Vendor Credits

Ramp does have a Vendor credits workflow. Again, we have a problem with the QBO-Centric Workflow: Vendor Credits do not sync from QBO to Ramp.

Therefore, the QBO-Centric workflow must be revised when a Vendor Credit is involved. For example, if a Vendor has two Bills and one Vendor Credit in QBO, and we know the Vendor Credit does not sync from QBO to Ramp, the bookkeeper must apply the Vendor Credit to a Bill inside of QBO first, then refresh the QBO-Ramp sync to show the correct Vendor balance due.

Full disclosure: Vendor credits must be handled the same way in Melio.

Lessons Learned

As mentioned, I have only been using Ramp to pay Vendor bills for a short time, but I am disappointed with the results. Ramp A/P would surely work better if I entered Vendor Bills directly in Ramp, but I attempted to use Ramp the same way I was using Melio. I recognize that my pre-conceived expectation that Ramp would behave the same way as Melio was incorrect.

I also must admit that using Melio for A/P has not been entirely issue-free. That being said, the QBO-Centric A/P workflow does work consistently well with Melio, and problems faced along the way are outliers. Most importantly, the QBO-Melio workflow maintains an up-to-date and accurate QBO Accounts Payable report.

I would be interested to hear from the Ramp team about my A/P concerns, as it’s possible that I have misunderstood how Ramp A/P does or should work, and there might be some Best Practices which I haven’t learned. But for now, my limited experience with Ramp A/P informs me it is not the best choice for my clients at this time.

Editor’s Disclaimer
The views and opinions expressed by the author are solely their own and do not reflect the views of The Woodard Report, Woodard Events, LLC, or any affiliated organizations. The content is provided for informational purposes and should not be interpreted as an official position of any Woodard entity.