Last Updated on December 12, 2023 by Flavia Calina
Manual payment processing is time-consuming and drains employee morale. B2B payment automation eliminates most of the tedium and frustration of accounts payable, freeing up staff to focus on other important projects.
In addition, automated systems can perform three-way matching to ensure invoices match purchase orders and receipts for goods and services. This provides deeper visibility into spending, allowing for better planning and budgeting.
Automated Payments
The speed and ease of getting paid matters in a business-to-business payment environment. Nine in 10 CFOs with accelerated payments digitization report that it’s led to more efficient operations.
Manual processes for paying invoices and accounts payable can result in delays, missed opportunities, and even lost revenue. B2B payment automation software can streamline this process by automatically transferring funds to your vendors and reconciling those payments in your books.
Whether you’re making payments via credit card or other traditional methods, automation can help improve your payment times, eliminate errors, and satisfy your employees. Automated payment processing also results in lower fees, increased visibility into payments and transactions, and more control of working capital.
When your workers are no longer burdened with tedious, error-prone, labor-intensive tasks, they have more time to focus on high-value projects that will grow your company. This translates into happier contractors, reduced late payments, and a greater likelihood of vendors agreeing to critical early payment discounts. That’s a win for everyone. Automated payments can also save your business significant transaction costs and interest rates.
Automated Invoice Capture
A key component of the accounts payable (AP) process, automated invoice capture allows you to receive and store digital invoices in physical paper or via electronic channels like email or web portals. Using OCR technology, the software converts paper or digital documents into text data that can be integrated with ERP systems and other financial and accounting applications.
For example, if an invoice is received as a PDF, the system will use OCR to automatically extract the key data, such as the vendor details and the amounts due. It can then check against the correct GL designation and perform 3-way or AI Smart Matching to verify invoices against purchase orders and good receipt notes.
By automating these processes, you can reduce the time spent processing manual invoices and eliminate errors that lead to delays in payments, fees and strained vendor relationships. In addition, you can unlock early payment discounts and gain visibility into your spending to optimize cash outflows.
Automated Check Printing
B2B payment automation software makes approving, recording, and delivering supplier payments as straightforward and secure as possible. All processes are handled in one digital system that is easy to use and intuitive for business accounting teams. This helps reduce the risk of human error and ensures that all financial data is correct and current.
The efficiencies gained by eliminating manual processing for invoice and check payments help save time and money for businesses. Accounts payable departments can also provide timely payments to vendors, encouraging them to agree to valuable early payment discounts for their services.
As a bonus, many B2B payment automation solutions allow businesses to print their checks, reducing the need for external entities like banks and cutting costs related to supplies and labor. Plus, businesses can customize check designs and details to align with their company’s brand identity or requirements. This gives finance leaders and business owners insight into their outgoing payments, which helps in better planning and budgeting.
Automated Reconciliation
Account reconciliation matches internal accounts receivable or payable fetched from ERPs/client systems with open items (payments) in bank statements. This helps ensure that all the gains made/received have been recorded in the general ledger and provides a clearer picture of your business’s financial health.
Manual reconciliation is time-consuming, costly and susceptible to errors. Whether due to data entry mistakes or simply the human factor of “fingering on the keyboard,” these errors can have major consequences. At best, they slow the closing process; at worst, they cause businesses to report incorrectly and make decisions with inaccurate information—both of which have negative business impacts.
With automated reconciliation, these errors are eliminated. For a small upfront cost to set up integrations between the systems and banks, businesses can automate this process to free their team from manual tasks. When selecting an automation solution, look for features and functionality that meet your business needs, including automation for auto-matching transactions, a centralized dashboard to help you quickly identify and address exceptions, and real-time updates for immediate discrepancy alerts. It would help if you also considered scalability as your business grows and your reconciliation needs change, which may affect pricing.
Automated Reporting
Business-to-business payments can be made using various methods, including paper checks, ACH, credit cards, or fintech platforms. B2B payment automation solutions make managing these traditional and newer payments on a single digital platform easier, eliminating multiple manual touchpoints where accounting errors commonly occur.
The automated system can quickly capture and verify invoice data, process payments, and match prices with the appropriate invoices. This helps you avoid missing out on early-payment discounts and late fees. It also frees up time for your Accounts Payable department to spend on other tasks.
The automated system can also help you prevent fraud by shoring up vulnerabilities against check related fraud that might otherwise go unnoticed. It can also increase customer service by reducing the time it takes to provide your suppliers and customers with information about their invoices and payment status. In addition, the automation system can generate reports with data that are more appealing to discerning clients than those produced manually, with visualizations and graphs rather than plain tables.
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