Ten Surprising Benefits When Businesses Manage Payments in One Place
The quarantine meant supporting remote workers, leaving many businesses scrambling to manage payment and work processes—a failure to automate left companies behind, unable to collaborate remotely or make and receive payments. Today businesses around the globe recognize the importance of investing in cloud automation.
Establishing an automated payment management system means managing payments in one convenient place where collaboration and real-time updates are available. In addition, many companies discover high growth means automation. Discover ten surprising benefits of investing in AP and payment automation today.
1. Human Resource Savings
Manual processes are labor-intensive and subject to inevitable human error. During the pandemic, outdated manual AP processes became cumbersome with a remote workforce. Trying to manage payments without access to a physical office with files was impossible. The C-suite soon recognized automation is necessary rather than a luxury.
Streamlined operations that take a fraction of the time to perform on the cloud reduce human resource needs, saving money on personnel to handle projects such as finalizing the end of the month or year. Plus, AP professionals have an opportunity to emerge from the back office to handle money-saving tasks, such as negotiating discounts for early payment. The AP team enjoys more thoughtful work that impacts the company’s bottom line rather than tedious manual tasks that take hours to complete.
2. Better Time Management
Time is money, and manual processes take a long time. A partially automated payments solution creates gaps in operations, leading to confusion due to a combination of methods. Since the quarantine, companies around the globe are eliminating manual processes to work in the cloud. Downtime during COVID-19 cost businesses time as they struggled to find ways to support a remote workforce. Recent research revealed most AP respondents found that inefficient processes and manual data entry were a pain point in their invoice processing workflow.
3. Minimized Costs and Optimized Cash Flow
Many companies faced cash flow problems during and post-pandemic. Manual invoice processes are costly, requiring hours of labor, printing costs, paper copies, and storage space. Storing invoices and payments in the cloud means getting rid of unnecessary costs for storage, printing, and personnel.
In addition, businesses avoid late fees with alerts about crucial updates such as payment due dates and duplicate invoices. The repetitive verification previously needed to correct inaccurate or potentially fraudulent payments is eliminated with automation, giving the C-suite added control over cash flow. According to the Business Insider Intelligence Report Accounts Payable Automation in 2020, companies using digital payables platforms realized up to 81 percent lower processing costs with 73 percent quicker processing cycle times.
The cost of interrupted operations makes a strong case for adopting AP and payment automation. Digital files make invoices easy to access and instantly ready in real-time for approval. Eliminating delays helps reduce late payments to build better relationships with suppliers. Companies that pay on time or early often gain access to perks, such as price reductions for loyalty and discounts for early payment. Plus, the end-of-the-month bottlenecking is eliminated with a shorter individual processing time.
4. Increased Collaboration
Collaboration became increasingly important during quarantine as the workforce rallied to come together via the cloud. A digital storage system puts files at the fingertips of everyone in the company in real-time, from any location and device. Document sharing, invoice approvals, error detection, and confirming details of transactions can be done remotely, rather than in person.
As personnel return to a physical office post-pandemic, automation continues to encourage meaningful collaboration. Remote team members can seamlessly work with the in-office personnel, with the flexibility to tackle all types of tasks from any location. As a result, there are no delays in important tasks, such as invoice approval and payment. Employees are less frustrated with streamlined operations, encouraging a positive company culture and improved teamwork.
5. Real-Time Access to Data
During quarantine, companies quickly discovered how fast time goes when it comes to invoicing and payments. Falling a few days behind can mean paying significant late fees, as well as compromising relationships with essential vendors and customers. Real-time access to pertinent financial data ensures payments are timely, protecting the company’s reputation and relationships.
Invoice approvals take seconds rather than days because invoices are waiting on a desk to be seen. Plus, management has instant access to key financial insights to take advantage of potential discounts, detect possible fraud, and monitor cash flow issues before they become significant problems. With that in mind, APA research revealed up to 56 percent of businesses faced cash flow forecasting problems because of AP issues.
6. Oversee Contracts to Compare Terms
Contracts with vendors and clients are the lifeblood of conducting business. Providing or receiving products or services according to specific terms defines business relationships.
Comparing the terms manually takes hours and ongoing attention to detail. An automated payment management system can be used to store contracts and other documentation about vendor and customer agreements.
In a digital environment, comparing terms is easy to determine the best contractors at the most competitive rates. The AP team emerges from tedious back-office functions to compare suppliers, negotiate terms, and present potential savings to the C-suite. As a result, the business works with quality vendors to pass on the highest level of service and savings to their valued clients.
7. Improved Efficiency
An automated payment management system streamlines operations, eliminating manual processes and accelerating cycle times. Slow cycle times can mean late payments, invoice bottlenecks, and backlogs. As a result, cash expenditures are unpredictable, and suppliers may charge additional fees. With faster cycle times, invoices are paid on time or early to build strong relationships with suppliers and take advantage of possible discounts.
Automation takes the pain out of typical AP processes, such as invoice matching, by eliminating manual labor, reducing payment errors. From inventory management to building solid relationships with vendors and clients, automation provides the tools to gauge payments and cash flow in real-time accurately.
8. Reduced Fraud
The right payment management system controls data and processes, so nothing important goes unnoticed. From compliance with applicable regulations to audit trails, automation keeps track of every detail to reduce potential fraud. As a result, invalid invoices are detected to stop fraud in its tracks before privacy and cash flow are compromised.
Limiting users to authorized functions is another way to reduce fraud. Payments are made and received in a secure environment for peace of mind. Secure filing and protection of sensitive data are crucial to maintaining a trustworthy reputation and remaining in compliance at all times.
9. Enhanced Relationships with Suppliers and Customers
Late payments harm a business’s reputation and its relationships with suppliers. Consistent late payments can lead to a supplier terminating the relationship, causing problems with services and the production of goods. As a result, customers may have to wait for what they want or pay a higher price. In addition, a company can lose vendors and clients due to poor payment practices.
Automation puts these relationships and benchmarks at the fingertips of the AP team and management for immediate analysis and collaboration. During the pandemic, maintaining these relationships remotely in real-time was crucial to stay in business. Plus, organizations that eliminate late payments are respected by suppliers and customers - which helps to boost the bottom line.
10. Customized Workflow and Scalability for a Competitive Edge
COVID-19 reminded management of the importance of scalability and creating a customized workflow. Automation makes it easy to scale back during a crisis or support growth during an upswing. In addition, scaling back helps businesses reduce costs during challenging times, such as a natural disaster or quarantine.
As companies open the doors after the pandemic, business is expected to increase. Automation makes it easy to grow and track changes in payments, inventory, cash flow, and contract terms. Automated payment management systems help companies get an edge on the competition.
Attempting to manage payments without automation means getting left behind. The world has learned how to work in the cloud since COVID-19, and automation is here to stay. As more talent demands flexibility and remote work, companies need to maintain a competitive edge by adopting an automated payment management system.
