“This is the way we have always done it.”
Time and again, those 9 soul-crushing words have led to stagnant business practices in accounts payable and beyond.
The manual processing of payments often leads to opportunities that could be improved. Some vendors offer early payment discounts or charge late fees.
But when a company is stuck in outdated processes simply because that has been the method of operation for as long as anyone with the company can remember, those opportunities will go largely unrealized.
Luckily, there is a better way in this modern age. Accounts payable can simplify and streamline payments for your organization.
Let's examine the challenges with manual supplier payments and build a list of ways vendor payment automation can work for you.
Traditional Supplier Payment Processing
Reams of paper are used by many companies today in the manual receipt, processing, and payment of vendor bills.
The manual entry of data into accounting systems is prone to error and inefficient time usage. Days or weeks may pass as accounts payable gets necessary documents and approval and before you know it payments are late and fees are assessed.
Why has every other department adopted automation, but accounts payable departments still need a way to automate payments?
What are Supplier Payments?
Every business has supporting vendors and suppliers that they work with. These companies may provide raw materials, goods, and services or play another role in the supply chain.
However, only some businesses pay vendor bills on time, and 45% of all vendor payments are late. This puts an unnatural strain on those businesses, even forcing them to raise prices over time to compensate.
Thousands of businesses lose revenue and crucial suppliers due to late payments. Business to Business (B2B) payment can improve when companies work to implement a payment solution that keeps them on target.
There are options now that were only dreamed of in the past. Powerful technologies can help streamline payments.
Medius Pay reinvents supplier payments with one automated process. It takes care of all your checks, ACH, card, and international payments.
A quick buying system that gives your staff the power to get what they need when they need it while staying compliant can be found in Medius Procurement. Purchasing from pre-negotiated contracts keeps procurement and finance on the same page.
What are the Challenges of Vendor Payments?
Organizational challenges may add to the complexity of accounts payable. Over time, payment processes become tangled when separate systems are used for individual steps in paying vendors.
For example, received invoices may be input into one system, approved in another, and processed for payment in yet another solution.
Payment fraud is a real business concern. So is the potential for duplicate billing. But when humans spend a lot of time on manual verification, it can lead to further errors or oversights.
A closed-off financial system can become a data silo – a repository controlled by a department and isolated from the rest of the organization – often to the point that the data is called into question or incompatible with the rest of the organization’s data.
Inefficiencies creep in along with the total time of invoice-to-payment. This may come from manual data entry or the communication methods used between buyer and seller.
Most organizations would benefit from the automation of vendor payment. Consider some of the positive outcomes of this adjustment.
Benefits of Supplier Payment Automation Processing
Time is money. Businesses can take an average of two weeks to approve payments with the input of two to five people for the approval process.
When you multiply that payment process by the number of invoices processed monthly, it becomes a large investment of employee time.
Simple changes, such as digital invoicing, can cut days off the processing time. A fully-managed and automated process may save up to half the time needed to process payments manually and the work needed to bring suppliers on to more efficient payment methods.
Money is money too. Add the extra costs that duplicate invoices, entry errors, and late fees cause, and the cost of processing a single invoice could be as much as $30.
When automated and streamlined processes are applied, the per-invoice cost can be reduced, directly related to more funds available to your business.
Accounts payable automation can help pay for itself.
Bad actors may try to use sophisticated methods to scam companies—social engineering attacks like phishing and impersonation cost companies billions.
But if a company has outdated accounts payable practices, it may not just be sophisticated fraudsters as a main concern. A simple duplicate invoice could lead to a double payment.
Vendor payment solutions can feature tools to catch duplicate bills so your business can have confidence that the simple things are being managed effectively.
How to Streamline Supplier Payments
Advanced vendor payment automation is the best way to regain control of your business spending. Medius gives your AP department this power.
It works with your enterprise resource planning (ERP) software system to:
- Manage your spending by streamlining invoicing, approvals, and payments
- Automate routine tasks so that AP staff can focus on more important items
- Give you insight into the state of your accounts so you can make smart decisions
This transformation to a modern way of accounting saves your business valuable time and money instead of following the same outdated processes simply because “that’s the way we’ve always done it.”
AP automation will take your company to the next level, simplify payment processes, and deliver an improved user experience.
Why is an all-in-one platform the answer to your accounts payable problems? In one word, efficiency. Efficiency for your staff and your whole company.
Our fully managed integrations with ERP and accounting systems work at the data level, meaning everyone operates with real-time information.
Payment options include card payments, wire transfers, online, B2B payment support, and more. This gives Medius the advantage of supporting every payment activity you need.
You can analyze data down to the line level on complex purchases. Use our 3-way matching to verify invoices against purchase orders and receipts to avoid costly fraudulent activity.
Build good relationships with suppliers when you streamline payments to them. Your reputation as a business is involved.
Consider Using a Supplier Payment Automation Solution
Take the next step to modernize your accounts payable processes. Streamline payments with the help of Medius solutions.
When you’re ready, book a demo to see what Medius can do to help you simplify your spending.
Are outdated processes holding you back?
Accounts payable staff are on the front line of business change and often are tasked to implement cash flow policy changes in near real time. In many ways, AP has become the control tower for managing spend within the organization. However, many of them are stuck with legacy tools and outdated processes, creating massive inefficiencies. The real promise of AI and machine learning within accounts payable is not just streamlining processes but eliminating them. This report from IDC explores how AP automation of today is evolving to become autonomous AP of tomorrow.