Payment automation saves money more than just eliminating paper checks and envelopes. It also helps to reduce AP costs by ensuring timely invoicing and payment of vendor invoices. It can shorten the time it takes to deposit payments, improve supplier relationships, and create better records. It can also reduce the risk of fraud and increase cash flow.
Increased Customer Satisfaction
One of the main benefits of having an automated payment system is that it can reduce the time and money your business has to spend on billing. It can also help eliminate issues like duplicate payments, often due to staff members accidentally paying the same invoice twice. This can cause significant problems for a company and strain its relationships with vendors. Another benefit of an automated payment system is that it can help to improve customer satisfaction. This is because it helps reduce the number of late payments received from customers. This is because it allows companies to automate their recurring payments and can ensure that customers are notified of their price due dates.
It can also help improve supplier satisfaction by reducing the time spent fielding vendor inquiries about invoice and payment statuses. It can also enable companies to offer more flexible payment options, such as e-invoicing and subscription-based services, which help meet their clients’ needs.
Reduced Risk of Fraud
Fraud can damage your business in many ways. It can be counterfeit goods, bogus refund requests or stolen payment information. Using an automated payment system can reduce your risk of fraud by eliminating the need for manual steps and increasing your visibility into transactions. Mechanical payment systems provide a built-in validation for your transactions, which can be done by comparing approved expenses in your invoice management tool and disbursements for transmission to your bank. This ensures that only valid data is transmitted, improving security, productivity, and trust. Errors in the accounts payable process consume valuable time, erode supplier relationships and can lead to duplicate payments. Best-in-class companies that leverage automation can significantly reduce the percentage of the same fees and overpayments. Automation increases staff satisfaction and boosts their work enjoyment levels by removing the need for human intervention in error-prone tasks. This makes your team more productive and happier, giving them the time to deliver the reliable service your customers expect from you. This is especially important when preventing payment fraud, which can be difficult to detect without a robust verification process.
Increased Cash Flow
In addition to increased customer satisfaction and less time spent on invoice issues, payment automation can improve cash flow by reducing the amount of money on your balance sheet. This is because the system can take payments instantly rather than manually. This can also help to reduce the number of staff members who spend their time chasing down outstanding payments or trying to find old spreadsheets that contain transaction details. Meanwhile, automated payment systems are designed to log all transactions so businesses can see what’s coming in and going out. This makes it easier for staff to identify and stop any suspicious activity. Invoices can be issued automatically and sent out via email or a customer portal, making it easy for customers to pay promptly. This can also help reduce the number and cost of late payments, which is a major benefit for businesses trying to build long-term relationships with suppliers. Faster processing of AP payments also helps to save on the costs associated with manual accounting processes, such as cheque printing and administration.
Increased Efficiency
Payment automation provides a platform that supports a variety of digital payments (ACH, debit and credit cards) that are delivered securely into your company’s bank account. This streamlined process eliminates the need for physical cash handling and check processing, reduces errors and streamlines bookkeeping.
Additionally, automated systems allow for more precise billing processes and better data collection. This improves the accuracy of financial analytics and forecasting. Lastly, a computerized payment system enables faster invoice processing and quicker payment. This accelerates your time-to-cash, frees up resources to fund growth, pay suppliers and take advantage of early payment discounts. Moreover, automation provides significant cost savings by eliminating manual labor in accounts payable departments. It improves accuracy by validating invoice data against ERP or accounting systems, automating stakeholder handoff and reducing duplicate invoicing.
Moreover, it provides real-time visibility and tracking for the entire payment process. A unified payment system also consolidates outbound files from various payment journals, resulting in a comprehensive and holistic historical record of payment activity. This enables the business to pinpoint and quickly resolve payment errors and inconsistencies.
Reduced Costs
While initial implementations may be costly, and some teams may find a learning curve, these systems can pay for themselves by saving your business on labor costs and reducing financial transaction fees. Additionally, digitized payment systems are typically cheaper than lockboxes for holding funds until deposited into your bank account. Better automated payments also reduce costs by reducing human error. While it’s impossible to eradicate errors in a manual process, intelligent software can pick up on mistakes that even the most diligent accounting team would miss. Automated systems also log every transaction, dramatically improving check & balance and significantly reducing the risk of cash fraud.
Furthermore, these platforms allow you to give suppliers real-time visibility into their transaction statuses via a portal, resulting in shorter payment cycles and improving supplier relations. This is particularly important for large businesses with global partnerships that need to support quick, seamless and secure vendor payments. Additionally, faster payments can help companies secure early payment discounts from their vendors. With these cost-saving benefits, an automated system can help businesses significantly reduce operating costs and refocus their team’s energy on more strategic initiatives.