Payment automation is crucial for companies wanting to streamline their AP (accounts payable) processes. From start to finish, including receiving, coding and keying, tracking approval, and issuing payment, manual invoice processing can take anywhere from several days to several weeks and cost upwards of $15USD per invoice. That’s where payment automation software comes in.
Not only can payment automation save AP teams enormous amounts of time and money by removing manual processes, it can also help reduce errors, enhance security and compliance, improve vendor relationships, and increase visibility into and control over cash flow.
In this blog post, we’ll explore everything you need to know about payment automation; from the basics behind the technology to what to look for in an ideal software solution.
What is payment automation software?
Payment automation software reduces the manual intervention required for AP teams to process payments, including invoices, payroll, vendor payments, and recurring transactions. This technology typically includes scheduling, processing, and tracking functionality.
What should I look for in a payment automation solution?
Choosing the right payment automation software can be the difference between an optimized and efficient AP workflow or a broken and burnt-out AP team. Here’s a few key considerations:
- Security and Compliance: Look for robust encryption, multi-factor authentication, and compliance with industry standards like PCI-DSS to safeguard financial data. Ensure the platform complies with regional and international financial regulations, including tax laws, anti-money laundering (AML) measures, and other standards.
- Scalability: Choose a solution that can scale with your company’s transaction volume and the types of payments you need to accommodate including ACH transfers, virtual credit cards, wire transfers, and direct debits.
- Global Functionality: Choose a solution that effortlessly manages cross-border and multi-currency payments; navigating international banking regulations and conversion rates with ease. It should also provide strong multi-currency support, eliminating the need for manual conversions or complicated calculations.
- User-Friendly Interface: A simple, intuitive interface will reduce the learning curve for your AP team and allow them to adopt the software quickly.
- Cost-Effectiveness: Look for a solution that balances features with affordability, offering good value for money without compromising on functionality.
Payment automation is a great first step towards AP optimization. But there’s more your organization can do!
How does payment automation work with AP automation?
Many payment automation software offerings are part of larger, more complete end-to-end AP automation solutions. Not only can AP automation enhance and simplify payment workflows, but it also offers an easy way to enjoy fewer processing errors, improved vendor relationships, and a reduced risk of fraud. Let’s explore each benefit individually:
- Eliminate manual data entry: Payment automation can make your AP team's invoice processing times 9x faster. Advanced technology like OCR (optical character recognition), AI (artificial intelligence) and ML (machine learning) can allow you to batch scan your paper invoices, eliminating manual data entry and reducing the risk of human error.
- On-time payment scheduling: Automate the scheduling of payments to vendors, suppliers, or employees, ensuring timely and accurate payments. This helps ensure on-time payments and strong vendor relationships which can open the door to vendor discounts.
- Flexible payment methods: Payment automation software lets you offer your vendor their preferred payment choice, including fast and easy digital payment preferences such as ACH or wire transfers. It also enables for streamlined cross-border payments and multi-currency capabilities so your payment methods can grow with your business needs.
- Customized approval workflows: Customized approval channels for your AP team helps reduce the risk of duplicate payments, errors, and fraudulent activities. You can be confident knowing that the right invoices are approved by the right people and paid at the right time.
- Effective data reconciliation: Take advantage of one-to-one reconciliation from your accounting system directly with your bank account. Easily match payments with corresponding invoices, update financial records in real-time, and get an accurate, real-time report of your monthly accrual.
- Fewer opportunities for fraud: 72% of businesses that make payments via paper checks have experienced fraud. Migrating from a paper check to an electronic payment method helps eliminate opportunities for fraud during payment processing.
Ready to automate? Quadient AP can help
Payment automation can offer impressive benefits to your AP team. But an end-to-end AP automation solution can offer even more. When you’re ready to take the next step toward either solution, reach out to Quadient AP!
Jill brings over 15 years of industry experience in financial services marketing. She is a passionate and motivated digital marketing professional with extensive experience in multi-channel marketing with a proven record of driving results for growing and established financial services brands like American Express, Billtrust, Heartland Payments Systems, and CAN Capital. Jill is experienced in planning and executing integrated marketing campaigns across channels: web, content, paid media, email, influencer marketing, social, SEO, and events.