Getting on top of payable accounts before essential services are cut off can be a herculean task, even for the most experienced accounts team. Over the last few years, there has been a boom in interest in automating the accounts payable division of the accounts department through the use of impressive software packages. Developments in this industry have made the herculean task far less intimidating so that your business is not suddenly left in the dark for failure to pay a bill.
But the age-old question remains do the benefits outweigh the cost? This article is dedicated to finding out the answer to that question. Before we dive head first into the benefits it needs to be noted that there are several cons, namely increased cost of adoption. Also, the software has to be integrated with the existing IT infrastructure, staff requires training, and the software needs to be tested. Traditionally these are the problems with the adoption of any new technology. That being said this multitrillion-dollar industry offers massive benefits.
One such benefit is time savings. Time is saved by primarily speeding up the process of paying bills and invoices, this is done by requiring as little input from the end user as possible, amongst other factors. The typical process involves manually reviewing each invoice, then filing it, then paying it. This can be streamlined as payment automation software allows for the setting up of permissions that only allow the right people to pay at the right time, as well as allowing for notifications to be set up to make sure nothing is forgotten.
Late payment of invoices often incurs some kind of penalty, be it interest accrued, reconnection fees, or just contractually determined penalties for late payment. The flip side of the coin is that some vendors provide discounts for early settlement of outstanding amounts. Payment automation software can help you take advantage of both avoiding late payment penalties and paying early to unlock a vendor’s discount. Over time this can be used to offset the adoption cost and cost associated with staff training.
The previous few years have given rise to organizations wanting more visibility and transparency within their entire supply chain process. Automated payment solutions help keep data, including supply chain data, up to date and where it should be. Good software will come with dashboards to help visibly display this data and other relevant information like vendor productivity. This provides a great level of insight into the organization’s supply chain. This in turn can be used to make better business decisions down the line.
As can be seen from this brief article payment automation software can have very direct and measurable benefits to the bottom line of any organization no matter the size. There are several other great benefits but they could fill an academic paper these can be summarized as being enabled by the data collected from the software. The data collected allows for actionable decisions to be made that can in turn increase productivity and reduce costs, two of the key drivers of business growth.