Payment Automation Trends
Managing invoices and payments is a complex and time-consuming task. The traditional methods are often manual, paper-based, and time-consuming, leading to inefficiencies, errors, and even late payments. However, with the rise of AP automation technology, businesses now have a powerful tool at their disposal: automated invoice payment systems. These payment systems streamline the invoicing and payment process, improving accuracy, and ultimately saving businesses time and money.
A recent study conducted by Ardent Partners called "The State of ePayables 2022" revealed that manual invoice processing is considerably more expensive than automated invoice processing. The study collected data from over 400 finance and accounting professionals across various industries. The results showed that manual invoice processing costs an average of $11.76 per invoice, while automated invoice processing costs an average of $3.45 per invoice, resulting in a 70% reduction in costs.
The study also revealed that manual invoice processing requires more time and resources than automated invoice processing. Finance and accounting professionals who manage invoices manually spend an average of 10 minutes per invoice, while those who use automated solutions spend only 2 minutes per invoice. This reduction in time is due to the automated system's ability to scan and extract data from invoices, eliminating redundant manual data entry.
Given the cost savings and added efficiency of payment automation, this blog will examine some of the latest payment technology trends as well as the future of payment processing. This includes how automation can help provide real-time visibility, timely payments and fewer disputes, resulting in improved supplier satisfaction.
What is Payment Automation Technology
At its most fundamental level, payment automation technology is a software application that automates the entire AP process, including invoice capture, validation, payment processing, and reconciliation. Payment automation technology helps businesses save time and reduce the risk of errors by streamlining the payment process and reducing costs associated with manual processing, such as labor, paper usage, and postage fees.
On a broader scale, however, a more robust AP automation technology can solve issues related to procurement, sourcing, contracts, supplier onboarding, and overall supplier management.
Automatic Payment of Invoices
Payment automation technology can drive efficiency in paying any invoice, most notably:
- Vendor invoices, where auto payment offers the added benefit of improving vendor relationships.
- While not technically an invoice, employee payroll delivers the convenience of direct deposit more reliably than paper checks. The same holds true for employee expense reimbursements.
- Recurring bills, such as utilities, rent, insurance, and other regular expenses.
- Recurring subscription fees for software, memberships, and other services.
- Credit card invoices, including global currency requirements
Trends in Automatic Payment Technology
Automated payment systems have revolutionized how businesses operate, offering many benefits, such as faster processing times, increased security, and reduced administrative costs. In the B2B space, these systems have taken on even more significance, becoming a critical component of the overall payment ecosystem. With the rapid advancement of technology, the payment landscape has been evolving rapidly, and there are several emerging trends that businesses must keep a close eye on. Here are ten key trends in B2B automated payment systems that businesses must be aware of:
- Electronic Invoicing:
Electronic invoicing, or e-invoicing, is becoming more popular in B2B transactions as businesses look for ways to automate the billing process and reduce errors.
- Automated Clearing House (ACH) Payments:
ACH payments are a common B2B payment method as they allow for automated transfers of funds between bank accounts.
- Virtual Credit Cards:
Virtual credit cards, which are one-time-use credit card numbers, are becoming more popular in B2B transactions as they offer a secure and convenient payment option.
- Payment Gateways:
Payment gateways, such as PayPal and Stripe, are increasingly being used by businesses to accept online payments and automate payment processing.
- Payment APIs:
Payment APIs allow businesses to integrate payment processing into their existing systems and workflows, making the payment process more efficient and streamlined.
- Automated Payment Reminders:
Automated payment reminders can help businesses reduce the number of late payments by sending reminders to customers automatically.
- Payment Optimization:
Payment optimization technology can help businesses choose the most cost-effective payment method for each transaction based on factors such as fees and exchange rates.
- Blockchain Payments:
Blockchain technology is being used to enable secure and transparent B2B payments, especially for international transactions.
- Multi-Currency Support, including Crypto
With global expansion, automated payment solutions are supporting multiple currencies, enabling them to pay customers in their local currency, including unbanked customers
- Integrated Payment Solutions:
Integrated payment solutions, such as those offered by accounting software providers, can help businesses automate payment processing and improve cash flow management.
The Growth of Dark Data in Automatic Payment Systems
The growth of automated payment systems is accompanied by a growth in what's called "dark data"; data that is collected and stored by organizations but not utilized in the actual payment process.
The growth of dark data in automatic payment systems can pose both challenges and opportunities for organizations. On the one hand, the accumulation of large amounts of unused data can lead to increased storage costs and potential privacy and security concerns. On the other hand, this data can also provide valuable insights into customer behavior and payment trends that can be used to improve the efficiency and effectiveness of the payment system.
To manage the growth of dark data in automatic payment systems, organizations must implement data governance policies and procedures that outline how data is collected, stored, analyzed, and used. This can help ensure that data is only collected for specific purposes and is properly secured and managed to mitigate any potential risks. They must be ever vigilant in security measures.
The Medius Choice: Robust AP Automation Technology
Medius has gained a global reputation for unprecedented levels of automated and truly touchless invoice processing, shortened lead times, improved vendor relationships, and greater control and visibility of financial metrics to its 3,000+ customers and 200,000+ unique users worldwide.
"Medius AP Automation enabled us to reach high automation rates right from the start. And we proactively work on continuous improvements. We now have better visibility into the process to understand where things go wrong and where we need to improve."
Pim Beijen
Group NWC Manager, SoftwareONE
Overall, Medius Payment Automation Software is a powerful tool that can help businesses improve efficiency, reduce costs, and increase accuracy in their accounts payable process. Offering the rapid path to value of a SaaS solution, Medius Payment Automation Software is a preferred solution for businesses looking to automate their accounts payable process:
- Easy to use with an intuitive, clear, and simple layout
- Highly configurable, allowing businesses to tailor the system to their specific needs
- Seamless integration with other systems
- AI and machine learning ensures accurate, on-time payments
- Exceptional customer support
Contact Medius to schedule a demo and learn how automated invoice payment technology can revolutionize your AP world.
