“It was the best of times, it was the worst of times,” is more than a Charles Dickens quote when it comes to antiquated, manual accounts payable processing. The difference between manual processes, such as invoice and document encoding, and automation is truly a tale of two cities. One city is a grim reminder of an inefficient past; the other, a token of advancement for your business’s future. Let’s take a look at how automation solutions can transform productivity for your AP team’s B2B payments.
The Traditional Payment Process
It’s important to have a full understanding of the traditional payment process before we can take a look at how to modernize your B2B bill payments. The traditional paper payment process is not only a significantly longer billing cycle, but it is also much more costly.
When companies operate on a paper process for B2B payments, snail mail delays the arrival of the initial invoice. It can be a matter of days and even weeks before a business receives the invoice because of weather and mail carrier delays. When the mail finally arrives, additional delays add up with the mere mounting of bills and envelopes that pile up in the payable department.
When the staff member is finally able to dedicate their attention to the said invoice, it comes time to manually process the bill and post it to the correct account. This is where entry errors come in that can later come back to bite your company in extra costs. If the amount entered is incorrect due to common human error, then you can risk faulty payments and need to restart the process.
After invoices are posted, the physical bill is shipped over to the approver in the clearing house department where it may sit on a desk until the approver can dedicate their full attention to reviewing the bill for invoice approval and make arrangements for payment with the vendor.
Once arrangements are made between the vendor and the approver, a paper check is cut and snail-mailed to the vendor while they wait again for days or even weeks. When the physical check reaches the vendor, more time goes by as they take the time to sign the paper check and deposit it or cash it once they get a chance to visit the bank or deposit it online through a banking app. This check usually takes about two to three days to go through and then the vendor and the payee must reconcile their bank accounts and update their books.
Say Goodbye to Paper Payments
If this paper payment process seems long and slow, that’s because it is. It’s time to say goodbye to these traditional processes and modernize your accounts payable with automation. No one wants to wait this long to be paid and this invoice processing system allows too much room for human error.
The gig economy is booming right now and industry professionals will simply do business with someone else if they find that your payment process is taking too long. Digital payments are simply the preferred payment type of the 21st century.
Paper check payments and cash payments are becoming extinct as businesses find the automated payment experience to be much faster and cheaper. It’s time to jump ship on your entire paper payment processing system and hop on board with modern technology in payable automation.
B2B Payment Automation in Action
Automated B2B payments trim your invoicing process down to four easy steps. First, the electronic invoice is sent via email to the staff member in charge of accounts payable.
The staff member enters the invoice into the automated clearing house that reviews the document by quickly making sure that the invoice isn’t a duplicate and confirming that all the necessary information is present for coding. This removes the tricky risk of human error or faulty payments, and it keeps all your payments data in one place.
Once the payment is coded for approval it is automatically sent to the staff member that must approve the invoice where they can swiftly press approve. This triggers the automatic digital wire transfer of payment to the vendor.
This entire payment process takes only two to three days in comparison to the weeks that paper processing requires. Payment innovation with digital payments simply makes business transactions faster, easier, and more secure. Business owners on both sides are pleased with this B2B payments solution because faster turnaround time means more room for business productivity in other areas and who doesn’t want that?
Four Benefits of B2B AP automation
Now let’s take a look at the four benefits of B2B AP automation:
Cost Reduction Electronic payments through AP automation offer payment discounts that reduce the cost per invoice which saves your business money.
Gone are the days of costly invoice processing fees with postage costs, faulty payments, and late fees. Automation software offers discounts and cashback on early payments that make your payable process more cost-effective.
Cost-saving benefits of adopting B2B automation include:
- More flexibility in the amount of time it takes your company to pay suppliers
- Less money and resources are needed to correct errors made through manual entry
- Increased visibility over invoices
- Improved Productivity
Cloud automation allows payable teams to work individually or together, no matter where they are or what device they use. Other productivity benefits are:
- Faster payment approvals
- Secure storage of financial data
- Financial insight through workflow data
Related: AP Automation Explained
- Eliminate Manual Data Entry
Let’s face it, manual data entry is likely one of the least desirable tasks your AP team handles. Automating this mundane task with intelligent data capture, or IDC, could expedite your invoice process. Modern AP automation utilizes state-of-the-art technology called Intelligent Data Capture (IDC) to lift key data off of inbound AP invoices faster and more accurately.
IDC is growing in its automation capabilities and can eliminate the need to manually enter valuable data from valuable documents such as remittances, purchase orders, and bills of lading. B2B payments processing is faster and more accurate when you let the software digitally input data.
Related: Understanding Intelligent Data Capture
- Enhanced Fraud Protection
It is common for businesses to fall victim to ransomware and phishing attacks as a result of the manual, and often paper-based, processes of capturing, approving, and paying invoices. Adopting an automation process can decrease the risk of fraud exposure and offer more secure business transactions by:
- Eliminating high-risk paper-based systems
- Encouraging strict adherence to organizational and departmental processes
Even with an automated process, your AP team must be risk aware by verifying changes in vendor payment locations, confirming fund transfer requests before processing payments, and reviewing double sender information to keep your company’s financial data safe and secure.