Smart, secure and streamlined payments convert your AP department from a cost center to a revenue generator.
Updated Sept 30, 2022
Companies of all sizes are continually faced with keeping pace with advanced technologies. The need to be more efficient, cost-effective, and scalable is important in all aspects of business, especially payments. Accounts Payable (AP) automation is not a new technology, but it is one that many companies often get wrong. Some of the answers to typical AP automation questions may change your mind about your old manual AP process.
Below are some of the most common FAQs about AP Automation.
Accounts Payable (AP) automation is digitizing or automating the accounts payable process. It eliminates the manual, outdated processes of the AP department, such as printing, stuffing, and mailing paper checks, as well as manually reconciling paper bank statements every month. AP Automation enables vendors to get paid more quickly, makes reconciliation effortless, and protects against payments fraud. By automating AP, companies can save money and redirect resources to more profitable tasks.
AP automation is a viable and beneficial solution for any sized business. Removing manual processes reduces errors and saves time. A small business’ payment process needs to be able to grow as the business grows. AP automation processes are scalable, while manual processes are not.
The latest AP automation technology ensures there is no lengthy implementation process or investment required. Generally, the transition to an automated AP system could take up to a few weeks or less, depending on system complexities and program customization needs. Robotic Process Automation (RPA) allows for customizable controls with little or no IT involvement.
No. Many organizations hesitate to move to an automated AP platform because they believe more staff and company resources are needed to support the transition. In actuality, it’s quite the opposite.
AP automation simplifies your business operations, allowing it to run more efficiently, reducing the time employees spend on manual data processes. Many companies find that after moving to an automated AP platform, their teams can spend more time on analytical and strategic initiatives. AP automation moves the AP team into a modern, digitized process that is scalable and easy to learn.
AP automation software will seamlessly integrate with your existing ERP. Once integrated, the automated AP platform will receive information from the ERP, such as active vendors, purchase orders, and invoices.
No. You will actually gain more control over your payments with AP automation.
An automated AP system gives you full visibility of payment activity 24/7, which is greater access than manual handwritten ledgers or excel sheets. In addition, workflow and approval processes are enhanced and can be executed from anywhere. You have assurance payments are received (no lost checks). And you have better control over cash flow and timing of vendor payments that allow you to maximize early payment discounts wherever possible.
A virtual credit card is a 16-digit, single-use card number that is issued for a specific transaction or amount, with no physical card attached to it. Predefined restrictions can be set up on the card, including where the card can be used, how much can be spent, and the usage period. After approved use, the card number becomes invalid.
Paper checks result in a significant expense for AP, costing approximately $5-10 per invoice. There are high processing fees associated with checks, and they require considerable manual processing by employees.
When a company eliminates paper checks, those bank processing fees go away, along with the costs of paper, printing, postage, and mailing. There’s also no need to continue chasing after checks that get lost in the mail and result in additional fees.
Accounts payable automation and virtual credit cards are the most current and secure solutions to the widespread problem of B2B payments fraud.
AP automation eliminates the need for manual and paper processes that expose your data to potential scammers. Software is monitored and managed by experienced solutions providers and has built-in fraud detection that searches for red flags and signals suspicious activity. Virtual cards can only be used for approved vendors and amounts, and the number becomes void once that payment has been made, making them essentially fraud-proof to outside hackers.
A common misconception about virtual cards is that vendors may not be willing to accept this type of payment. However, the reality is that enrollment numbers are generally higher than most expect and are often enough for a significant ROI.
Once vendors are informed and educated about how electronic payments work, it is not hard to convince them to accept virtual card payments. The time and money that virtual cards save, remittance details they provide, faster payment receipt, and the increase in available cash flow convince vendors that virtual cards are a win-win.
There are many benefits to AP automation including the elimination of manual processes, paying vendors faster, increasing security, and maximizing the efficiency of your company’s time. There is also the opportunity to create additional revenue by collecting monthly cash rebates on virtual card spend volume. With no additional investment needed on your part, plus a quick and easy integration, the decision to automate is really a no-brainer.
Corporate Spending Innovations (CSI) is a global FinTech leader providing innovative payment solutions to world-leading brands across all industries. CSI automates and digitizes B2B payments with a safe and highly secure cloud-based payments platform. For a more efficient way to manage payables, including virtual credit card, B2B Payments Network, ACH, and check, book a demo here.
CSI is a an Edenred Company, the global leader in payment solutions for the working world.