If you’re using software algorithms to help you more effectively buy ads, why not use technology to optimize your accounts payable, too?
The formula for success in business is simple, the value of your output must be greater than the cost of your input. In other words, the less you spend to run your agency, the more profit you’ll realize on your deals. But how do you attract and retain business and keep costs down in today’s climate—where, in addition to quality and fair pricing, clients expect an increasingly customized, streamlined experience?
The solution is technology.
In order to gain operational efficiencies and gain an edge over the competition, more and more businesses are transitioning from analog to digital processes. In fact, according to a 2019 survey of 1,267 CEOs of small and midsize businesses, technology was the number-one ranked area flagged for investment, with well over half of the CEOs planning to increase their technology budgets within the year. (Vistage)
We’ve seen this shift to digital in the advertising industry, for example, as agencies move from ad networks to programmatic buying via demand-side platforms (DSPs). Unlike the network model, which limits ad buyers to predefined audience segments for negotiated ad rates, DSPs allow them to target an audience that meets hand-selected criteria with the ad rate determined by computerized real-time bidding. Programmatic buying helps agencies more effectively target their audience and often, results in more competitive ad rates—both of which help agencies maximize ROI for their clients. Also, DSPs make it easy to track campaign metrics in order to fulfill client reporting requirements.
It’s easy to see why, by 2024, programmatic advertising via DSPs is expected to grow from 2019’s $9.7 billion in annual revenue to $31.3 billion, a compound annual growth rate of 26.3 percent. (MarTech Advisor)
This begs the question, if it’s become the norm to use DSPs—software algorithms—to buy ad space more effectively, why not leverage technology to buy everything? In the same way that programmatic advertising helps ad buyers realize better rates, improved distribution, and simplified reporting and performance analysis, a well-built payments program can help your accounts payable team optimize vendor payments. Here’s how:
Reduce Time and Cost to Process Accounts Payable
Manual accounts payable processes are time-consuming and expensive. In a fraction of the time, with improved accuracy, financial technology can free up employee time for more valuable, revenue-generating tasks by:
- Automating card, check, ACH, and FX transactions
- Enforcing rules that govern approval processes
- Identifying vendor errors, invoice discrepancies, and opportunities for early payment discounts
- Maintaining detailed transaction data for easy reconciliation, credit card statement review, and reporting—which means better transparency and less time spent responding to inquiries about processed payments
Plus, by choosing a payments platform that integrates with your enterprise resource planning (ERP) or accounting system, you’ll have full control and visibility over your entire payment program in a single dashboard.
Minimize the Expense of Checks
Paper checks are a costly way to collect payments with labor costs, processing fees, and hidden markups. In 2018, North American businesses processed over $18 trillion in paper checks, and it cost those companies $550 billion in profit due to delays, labor, and errors.(Paystand)
Many agencies discover that vendors are happy to accept cards because it means a faster payment—a win-win. Some fintechs will even manage those conversations, negotiating different payment terms, on your agency’s behalf.
Increase Security and Reduce Fraud with Virtual Cards
More than a million checks are forged in the U.S. every day, resulting in $18.7 billion in annual losses. (FBI) With check fraud on the rise, it makes sense to consider replacing paper checks with virtual, one-time use credit cards. With virtual cards—a 16-digit credit card number that isn’t printed on an actual, physical card—you have total control over transaction amount, merchant type, expiration date, location of use and more. Virtual cards can also be restricted to a single use, so they can’t be used more than once.
Virtual cards are purely digital so using them eliminates the risk of card loss, misuse, and theft. Plus, as an added benefit, every transaction made with a virtual card includes detailed information to make quick work of record-keeping and reconciliation—an incredible tool for advertising agencies when it comes to managing digital campaigns on behalf of their clients.
Find the Right Technology Partner
Making the switch to technology-managed processes—whether it’s ad buying or accounts payable—is smart business. The key to success is identifying the right solution and provider for your business based on:
- Flexibility and ability to customize the solution to your needs (now and as you grow)
- Compatibility and ability to integrate with your current system(s)
- Service and support delivery