Corporate Benefits of Payment Automation
B2B transactions in the US surpassed the $1 trillion mark in 2019, and the B2B market size is projected to reach $63,084 billion by 2026. This trend is promising to businesses that intend to adopt digital payment platforms in place of paper checks. The popularity of mobile payments among customers is on the rise, and new technologies like AI and big data analytics are helping companies sustain a digital payment infrastructure. Payment automation provides numerous benefits to business, including:
An automated payment system can reduce your firm’s invoice cycle time by 80%. Your team will not have to spend weeks creating invoices, which can easily get misplaced around the business premises.
An Aberdeen Group study showed that automation could reduce invoice processing time from 20.8 to 3.8 days. Digital platforms will also help employees to process up to five times the average number of invoices they prepare every month.
Technologies like character recognition software will scan invoice headers, and payables will be directed to your pre-determined company processes. Automating your payment processes reduces the need for human interaction, and your employees will save time to be used in essential activities.
Automated systems can process vast volumes of information faster than any team of accountants. Machine learning has been disrupting the accounting industry by taking over repetitive and manual tasks from financial staff. This technology relies on historical performance data to complete processes, automate bank reconciliations, and highlights errors.
Manual workflows often result in duplicate payments, and employees have to track down many documents to correct such mistakes. Digital systems are error-free, fast and efficient. You can, therefore, utilize the talent in your company in strategic activities rather than time-consuming processes like data entry and invoice tracking.
Monitoring manual workflows is tasking, and employees often have to sift through files if there is an issue. With payment automation, you only have to monitor the payment procedures and identify the relevant parties if there is a delay. You get real-time information, which helps the oversight departments in the company to do their job.
Technologies like cloud automation eliminate the need to be physically present to approve invoices, which means that your suppliers will get paid even if the boss is away. You can customize user settings when using accounting software to ensure only the approved parties can access privileged information.
A 2015 study by JP Morgan revealed that 71% of companies faced actual or attempted check fraud. The FBI estimates annual losses from check fraud at $18.7 billion, and over a million checks are forged daily.
Automated systems create digital trails, which means that you can track payment from initiation until it is paid. These systems flag suspicious invoices that would otherwise pass unnoticed. The information of users will also be encrypted when using digital payment methods.
Improved Customer and Supplier Relationships
Automated systems will help you process invoices faster, and pay your suppliers on time. You can integrate a supplier’s portal in your software for them to track the status of their payments. The vendors will not need to keep calling your office as they can quickly look up any billing information.
Quick turnaround times can also help you take advantage of more discounts. Some suppliers will offer discounts if you can make early payments on bulk orders.
Gain more Insight
Automated systems will help you track customer behavior and determine if your strategies are working as intended. You can easily compile reports on sales, revenues, and cash flow to assess the performance of your business. Such information is also vital when making business plans and projections.
Automated systems will spare you of late penalties because everything is processed before deadlines. Printing and mailing costs will also be reduced, and you will incur lower storage costs due to minimal paperwork. You will also save the money spent on correcting mistakes since accounting software is accurate.
Despite all the above benefits of automated payment systems, many companies continue to utilize manual invoicing methods. Payment automation will help you manage your firm’s cash flow and financial processes in a timely and cost-saving manner