4 Reasons to Automate B2B Payments

“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
  1. 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

  1. 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 

  1. 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. 

 

What is Intelligent Data Capture?

A complete automation solution is more than just a single piece of software. By evaluating your organization’s needs and current processes, you can identify gaps and determine the best solutions to fill them. 

To best understand how software solutions can benefit your organization, it’s important to gain insight into how they work. Intelligent Data Capture is a crucial part of a successful automation strategy and can help take your existing document management solution to the next level. 

What is Intelligent Data Capture and how does it work?

In technical terms, Intelligent Data Capture (IDC) is the automated process of identifying and extracting critical information from incoming paper and electronic documents without manual intervention. 

In layman’s terms, IDC eliminates manual data entry by using technology. By investing in Intelligent Data Capture, your organization can save time, money, and resources by no longer having to manually extract data from your documents and organize it. 

Mosaic utilizes our partner DocStar’s Intelligent Data Capture tool to help enhance our customers’ current document processes. The way their IDC works is that once a solution is configured, it “learns” the common document types you use and builds a knowledge database of these document types. 

What this means is that IDC can classify the type of document you input (for example a purchase order versus an invoice), then extract the key information from that document, validate it, and then input that data into your database, enterprise resource planning software, or another business system of your choice. This process is different than traditional Optical Character Recognition because it goes above and beyond simply identifying the data, it also extracts and inputs it based on your needs. 

Intelligent Data Capture is extremely accurate while still being simple to set up and configure. Rather than spending additional time on configuration, IDC’s unique self-learning abilities mean that you can simply submit a single sample of the common document types you use. This means you can begin utilizing your solution sooner while still having the benefits of a sophisticated solution. Because Intelligent Data Capture “teaches” itself, it’s flexible enough to grow and adjust alongside your organization’s needs.

The most notable features of IDC include invoice recognition and data lifting, forms processing, automated document classification (separates various document types automatically), and exports to just about any accounting or line of business application.

Other, less advanced, intelligent data capture solutions had lower accuracy rates and required a substantial investment in set-up and configuration. Today’s solutions, on the other hand, are easy to configure and intelligent enough to learn and adapt for maximum accuracy and flexibility.

The steps in IDC’s process look like:

  • Input
  • Classify
  • Capture
  • Validate
  • Verify
  • Submit

These steps, when done manually, can take significant time and resources, but with Intelligent Data Capture, it can be simplified and streamlined.  

How can IDC benefit your organization?

At its core, Intelligent Data Capture is designed to eliminate manual data entry from every paper document you may have. This includes any form, invoice, remittance, purchase order, or any other type of document you come across in order to complete your daily tasks. By doing this, you can significantly reduce your headcount and give your employees more valuable tasks to focus on rather than spend hours and hours completing manual data entry. Through IDC your organization can double or triple the output of staff members processing inbound forms, without making them work harder.

Plain and simple, why pay an employee to do something that can be done through automation?

Intelligent Data Capture also increases accuracy significantly. When people extract data, human errors are bound to happen. Whether that be an employee misreading something, or mistyping data, the consequences can be significant. With IDC, that risk diminishes to close to zero. 

Since this process is so much more efficient, your organization can also benefit from early payment discounts and avoid any late payment fees. 

How to implement Intelligent Data Capture

Mosaic has experience in deploying DocStar IDC for organizations of all sizes, and we’d be glad to help your business save time and money by eliminating manual data entry. Give us a call at 1-800-387-7859 to learn more about how we can help.  

 

Understanding the Legality of Scanned Documents

Many organizations who are considering a document management solution aren’t entirely sure if the documents they scan and store in their ECM are going to be legally admissible or compliant. Oftentimes, rather than seek out a more effective storage solution, they let piles of paperwork build up by holding on to documents longer than necessary.

Typically physically storing important records in filing cabinets or closets puts them more at risk for being stolen, destroyed, or lost than digital record keeping.

But before moving all your records into digital storage, it’s important to understand the legalities of the process. What are the rules of records management, and most importantly, are scanned documents legally accepted?

What are the laws?

In the United States, there are two laws that clearly establish if digitally scanned documents managed on an ECM are admissible in court:

1. The Uniform Photographic Copies of Business and Public Records as Evidence Act (UPA) (US 1128‐0020‐00) ‐ Enacted by almost all states, it specifies that reproductions of records have the same legal significance as the original and may be used in place of the original for all purposes including evidence.

What does this mean? In short, it means that copies, microfilm, and other reproductions, documents are the same as physical documents and are just as legally valid.

2. The Uniform Rules of Evidence (US 128‐0060‐00 to 0170‐00) ‐ the other major uniform law, “The Uniform Rules of Evidence“, has been adopted by the United States federal courts and 34 states. The Rules of Evidence allow a duplicate to be admissible in evidence “to the same extent as an original” and defines a duplicate as a counterpart produced by any technique “which accurately reproduces the original.”

What does this mean? It means that as long as your digital duplicates are the same as the original (which with the proper processes and procedures they would be), you can utilize them in U.S. Federal Courts and the majority of state courts.

Both laws state that duplicate records may be admitted into evidence if they accurately reproduce the original. Because document imaging technology is a duplication technology similar to physical reproduction methods such as photocopies, microfilm, and facsimile, digitally stored documents fit within these regulations.

What classifies as a reproduction?

The most widely‐used reproduction techniques, including photocopy, microfilm, facsimile, and document imaging all exhibit the same characteristics:

Image Capture

A photographic, scanning, or another process that identifies and captures the image of the original document.

Image Manipulation

A photographic, electronic, photostatic, or another process that transforms the captured image into a format for storing and reproducing the image.

Visible Reproduction

A photographic, photostatic, printing, or another process that converts the manipulated image into visible form. A document imaging system, for example, utilizes an electronic scanner for image recognition, computer software, memory and optical disk storage for image manipulation, and graphic terminals and laser printers to make the image visible.

A document imaging system is similar to other reproduction technologies, it utilizes an electronic scanner for image recognition; computer software, memory and optical disk storage for image manipulation, and graphic terminals and laser printers to make the image visible.

As long as it’s correctly done, courts have upheld that imaging and scanning are just as legally binding as paper documents.

Regardless of how you store your documents, audit trails are recommended in order to prove that a transaction was properly processed by the organization. With an audit trail, you can instantly know every time an electronic document has been viewed or manipulated. They help ensure document integrity and prove that the image is a true representation of the original ‐ reducing exposure to risk. Mosaic’s solutions allow for the easy creation of audit trails and

In Conclusion

In the United States, records made from a document imaging system will be admissible in evidence to the same extent as the original record, as long as the document imaging records accurately reproduce the original. If that standard has been met, an organization can feel secure in destroying the original records and relying on digital records as evidence.

Similarly, records required by government agencies can be maintained in document imaging systems. Whenever the government agency requests information, the organization would prepare duplicates from the document imaging system. The government agency may require that original records be kept or that your document imaging system meet certain standards.

Government agencies in the United States may also use document imaging systems to manage and retrieve information. Original short‐term paper records could be destroyed after the images have accurately been preserved in a document imaging system. Since document imaging records are not archival, long‐term (retention over 10 years) or permanent records must generally be maintained in either paper or archival microfilm form. It is not expected that state and federal archives will permit the destruction of long‐term paper records after scanning into a document imaging system, even when document imaging are certified for archival purposes.