Automate invoice processing to prevent late payments

A recent IBM report named AP the “most automatable” function in any business. Amongst large finance teams, manual AP tasks can take up 44 per cent of their total time. These manual tasks include entering invoice information into the company’s financial systems, making payments, and reconciling transactions. When data is manually entered and processed through these systems, there can be a higher likelihood of errors, which leads to more costly invoice processing. In contrast, implementing an integrated payment system where every invoice and payment stems from a single source of truth facilitates more efficient invoice processing and speeds up cash flow across the supply chain.

Take advantage of flexible payment options

By using AP automation and integrated payment software, businesses can significantly enhance their invoice processing efficiency. This streamlined approach allows for faster handling of supplier invoices, reducing manual involvement. Moreover, businesses can benefit from a variety of flexible payment options that align seamlessly with their cashflow needs.

One such option is early settlement discounts. In exchange for paying an invoice before the due date, a discount is offered. Although the specifics of these discounts may vary across different businesses, consistently taking advantage of even small discounts can accumulate substantial savings over time. Furthermore, this practice fosters stronger relationships with suppliers, potentially leading to additional pricing efficiencies and improved trade terms. 

Extended payment terms can also be a valuable addition and they allow AP teams to strike a balance between meeting financial obligations and maintaining liquidity. Credit cards play a crucial role in this strategy. When paying invoices, AP teams can use physical or virtual credit cards to delay the actual cash outflow by taking advantage of interest-free periods, or access to working capital offered by their provider. These extended terms provide a win-win situation, benefiting both parties involved.

Strengthen cashflow management

AP automation gives your business access to a more accurate data set which is essential for proactive cash flow management. By using a system that automates invoice processing and integrates with your accounting and ERP systems, the data can be visualised in a real-time cash flow analysis, showing decision-makers when payments need to be made. This allows for timely adjustments in either delaying or moving payments forward to best align with the company’s long-term objectives. Finance teams will also have the data to plan for future purchases and investments in growth.

Transform your accounts payable function today

Technology is driving transformation for AP teams. By replacing legacy manual systems and processes with sophisticated software that improves efficiency, reduces data entry errors, and facilitates stronger cash flow across the supply chain, AP teams can transform into a strategic, revenue-generating function that brings value to the business. If you’re looking to make your AP function more efficient and strategic, automating your AP processes is the best place to start.

Spenda’s AP solution features a user-friendly self-guided setup, allowing users to onboard themselves effortlessly and efficiently streamline their payables. Additionally, approved account holders have access to a range of payment methods, including the option to apply for an unsecured credit facility (using virtual credit cards) to pay business expenses. To ensure security, payments are protected by Spenda Wallet, a payment authorisation app that works seamlessly alongside Spenda AP. These two integrated products not only expedite invoice payments but also provide a robust defence against accounts payable fraud.

To set up a Spenda account and get 30 days free*, click HERE

Spenda is an integrated business platform that enables businesses across the supply chain to sell better and get paid faster. We serve as both a software solutions provider and a payment processor and deliver the essential infrastructure to streamline business processes before, during and after the payment event. Our connected platform displaces multiple, disparate systems in favour of one collaborative solution that improves transactional efficiency between businesses. 

This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.

*30 Days Free Terms & Conditions. By signing up, you are entitled to a complimentary 30-day trial of Spenda’s Accounts Payable software. This trial covers only software usage fees and excludes invoice payment processing fees. Following the trial period, you will be given the choice to upgrade to a paid account or to delete your account. Monthly software fees start at $250 per month. Enterprise fees are available on request.

The post <strong>How to transform your accounts payable function into a strategic powerhouse</strong> appeared first on Inside Small Business.

The core document at the heart of accounts payable processing is the invoice. Yet, while every invoice contains much of the same information, it is rarely represented in the same way using consistent data formats. As well as structured data such as due dates and invoice numbers, there is also unstructured data such as product descriptions and payment instructions. And invoices can arrive in hard copy, in digital fuels such as Word documents or PDFs, and even on paper.

Robotic process automation (RPA) in accounts payable isn’t a silver bullet. But, it can enhance efficiency and operational control so staff can focus on exception handling and more complex tasks.

When an invoice arrives into accounts payable, someone needs to read that invoice, find the pertinent information on it and then transpose that data into your finance application. This process is time consuming, tedious and can be prone to error.

Some of the data in an invoice is structured. Dates, unique identifiers, supplier names, ABNs and other details are relatively easy to identify. But other things, such as product and service descriptions and payment instructions can be harder to transpose into your own system.

The good news is that many of these tasks can be automated. While the invoices that come from all your different suppliers look different, software robots are capable of finding the relevant information, by using Optical Character Recognition (OCR) and automatically enter it into your accounting system. Instead of a person reading and manually typing data into systems, intelligent automation does this work.

In many organisations, before a purchase is made, a purchase order needs to be raised. When the invoice arrives for payment, an accounts payable operator needs to ensure that the invoiced amount matches the purchase order. This is a process that can be automated. This allows the accounts payable team to focus on investigating exceptions rather than spending time checking off the vast majority of orders that match.

End of month, quarter and year is always a busy time for everyone in the accounts team. Automation can streamline many of the processes needed during these periods. For example, account reconciliation often requires multiple data exports and complex spreadsheets that are manually wrangled to ensure data in accounts systems, bank transactions, and other systems is reconciled.

Intelligent automation can liberate accounts payable teams. Rather than spending time reconciling data, RPA can automate the various data transfers that are required and automatically flag exceptions. Rather than spending time moving data, staff can focus on investigating exceptions and other anomalies.

Intelligent automation can work at any time. This means tedious tasks can be executed after hours so team members can arrive at work and focus on higher-value tasks as soon as they arrive at work. Error rates are reduced because the technology doesn’t get tired. Once configured, it will repeat the same task over and over. And if the volume of invoices increases, it will keep working.

RPA gives businesses of any size an opportunity to reduce the amount of repetitive and tedious work your accounts payable team faces. Intelligent automation works continuously and with great accuracy, your accounts team can put their expertise and experience to work solving more complex problems and ensuring that all exceptions are detected and handled.

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