Capital management is a constant challenge for all types of businesses, requiring them to invest considerable sums to manage cash flow, accounts payable (AP), accounts receivable (AR), and other related tasks.
Problems range from incorrect invoices to lack of cash to late payments – from customers or suppliers – all of which take a lot of time and work to fix. In fact, 49% of invoices produced by businesses in the United States become overdue, as shown in the “AP Automation Tracker”, a PYMNTS and Beans collaboration.
Get the report: AP Automation Tracker
Late bill payments have become widespread throughout the pandemic as businesses grapple with economic hardship, reduced cash flow and other complications.
A major contributor to these complications is the reliance on paper-based payments and manual processes. These old fashioned methods can be time consuming and expensive in terms of labor, bank charges, check printing and postage.
Improve the invoicing process
The costs of these delays and errors cause many companies to develop or purchase advanced technology solutions to address them. Some of the most promising solutions leverage artificial intelligence (AI), machine learning (ML) or some other form of automated software, both to reduce the incidence of complications and to resolve those that arise. occur.
For example, automation means that recurring payments such as utilities or rent can be set up to go from invoice to payment with purchase order approvals already in place, Beanworks CEO Catherine Dahl said PYMNTS in a recent interview.
“You should be able to follow the bill through to payment and have someone at the end to make sure that ‘yes, all the dots line up,'” Dahl said. “There are day-to-day dashboards where the accounting team manages the process, but they are not Do the process.”
Read more: AI-powered payment platforms put paper processes under scrutiny
Digitizing and automating endpoints improves the billing process in several ways, making billing cheaper, faster and more accurate.
Improve business results
The most sophisticated AP automation systems leverage AI and ML to predict when payments are due and process them automatically, resulting in a more efficient accounting department. Ninety-one percent of CFOs say accelerating payments digitization has made their payments operations more efficient.
Faster, more accurate AP directly translates to better capital management, which can ensure timely paychecks and AR reconciliation, as well as a host of other business improvements. Ninety-six percent of CFOs believe that optimized AP/AR processes are very important to maintaining healthy balance sheets.
Although most businesses still rely on cash and checks to pay vendors and suppliers, they are slowly reducing this reliance. For example, 68% of businesses report using Automated Clearing House (ACH) payments more frequently since the pandemic began.
Digitization and automation can have significant impacts on business bottom lines, reducing processing costs per invoice and delivering the downstream benefits of better capital management, improved cash flow and faster pay.
Additionally, automating AP systems can help businesses of all types reduce errors and delays and allow accounting staff to focus on the big picture for the benefit of the entire business.
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NEW PYMNTS DATA: THE TRUTH ABOUT BNPL AND STORED CARDS – APRIL 2022
On: Shoppers who have store cards use them for 87% of all eligible purchases – but that doesn’t mean retailers should start buy now, pay later (BNPL) options at checkout. The Truth About BNPL and Store Cards, a collaboration between PYMNTS and PayPal, surveys 2,161 consumers to find out why providing both BNPL and Store Cards is key to helping merchants maximize conversion.
