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Any expanding business will have growing pains, but your response to these obstacles will determine your future potential. As your business grows, teams such as accounting and payable departments may begin to struggle and fall behind, impeding your overall progress. Typically, this delay is caused by friction between human processes and the increasing number of orders and bills that the accounts payable staff must complete.
Manual processes may have been adequate during the company's growth, but eventually, they can no longer sustain a modern enterprise. This guide examines how digital transformation can change the business world and help you quickly scale the accounts payable process. Payment processing solutions convert cumbersome operations into value-adding engines of intelligent business practices, making it suitable for both emerging and established firms to improve.
The advancement of technology and the rise of digital payments have rendered obsolete old accounts payable methods, as online payment processes are more efficient and reliable. Manual, paper-intensive modes of payment were formerly the simplest way to settle invoices, but no more. Technology enables online payments, allowing businesses to simplify and automate their payment operations along the supply chain.
Accuracy and efficiency in your payment processing system result in financial stability, which can aid in managing and expanding your cash flow. If your company processes payments traditionally, you're not alone. According to the AFP Electronic Payments Survey, 97 percent of businesses still pay a percentage of their vendors by cheque.
With the proper payment technology in place, the transition to online payment processing will be advantageous for your business for the following reasons:
• Decrease fraud - Electronic payments have emerged as the safest and most effective approach to enhance payment processing for any business because they are difficult to manipulate or expose to fraud and enable faster, more accurate payments.
• Timely and efficient payments - An automated payment method can assist your business in achieving its cash management goals and improve communication with your carriers.
• Reduce personnel workload - Since the payments are now automated and instantaneous, your accounts payable department will have more time to devote to more lucrative business prospects.
The largest payment processors enable you to automate everyday billing tasks, hence enhancing billing speed and efficiency. Automating a payment process is complex, but the advantages far outweigh the expenditures. If you're still using manual payment methods, it's time to consider switching.
Below are some tips and tools to help you with your payment processing automation.
The biggest obstacle when comparing accounting software for small businesses may not be the cost of the solutions, which have become more reasonable, nor the installation process, which can be completed relatively fast. A successful implementation plan involves persuading other employees that accounting software would improve their working lives rather than disrupt them. It is essential to collect statistics demonstrating how long invoice processing takes, how it affects the business's bottom line, and how much control an accounting software will provide.
It is also crucial to know the difference between a payment gateway vs payment processor. A payment processor is a solution that transmits payment information from your customers' cards to the issuing and acquiring banks. In contrast, a payment gateway communicates payment information to the processor.
So, if your business is currently only accepting one payment method, it may be time to integrate others. Account-to-account payments and Interac e-Transfer® for Business have become a secure, reliable and efficient method of payment. Offering customers numerous ways to pay delivers the convenience, and seamless experience consumers are looking for.
Finding the proper billing and payment software is a critical first step in automating your payment process. Analyze your internal operations and metrics to determine the most problematic billing issues. Research automated payment solutions to choose software that suits your requirements.
According to Fortune Business, the payment processing solutions market was worth over USD 48 billion in 2019 and is anticipated to grow at a CAGR of 11.7 percent from 2020 to 2027. This is due to the increased acceptance of value-added solutions by large Fintech organizations and the increasing demands for credit and debit card payments, prompting developers to provide advanced payment services globally.
Here are some crucial elements a high-quality automated payment system should possess.
☑️ Multichannel payments - This frees businesses from having to chase after the various ways people prefer to pay, leading to more sales and revenue.
☑️ Seamless integration - A developer-friendly API that can be white-labelled to ensure continuity across a brand.
☑️ Advanced reporting - Full visibility into the lifecycle of each transaction adds to easy reconciliation.
☑️ Customizable payment flows - Ability to automate bulk payments, scheduled payments and recurring payments.
☑️ Faster delivery of funds - Real-time and instant payments have become increasingly more common in the payment space.
☑️ Simple client onboarding - Customers want an easy and secure onboarding experience.
According to research from the American Productivity & Quality Center, organizations that utilize very little or zero automation when processing payments tend to spend more than $10 per invoice, whereas companies with few or no manual account payable procedures spend $2 or less each invoice. This is why invoice processing cost is such an important measure.
Manual invoicing is onerous and antiquated, and the time your organization spends creating, distributing, and monitoring paper invoices hinders them from focusing on more critical tasks. With automated electronic invoicing, you can recoup this time.
Manual invoicing directly influences your bottom line since human error leads to revenue loss. Automated billing systems eliminate the need for manual data entry, ensuring that clients are appropriately billed. The ability to deliver invoices fast, enabled by automation, helps reduce the invoice-to-cash cycle.
As you streamline your payment system, implement an efficient payment reminder procedure. Even though the payment schedule may be specifically outlined on an invoice, customers may occasionally neglect to pay on time. You can avoid this by providing prompt payment reminders.
An email is an excellent tool for invoice collection, but accounts receivable personnel spend time manually maintaining reminder calendars and sending client follow-ups. Instead, an automated payment system may simply handle these activities and guarantee that timely reminders are sent to consumers, thereby expediting payment.
After automating your billing process, you can concentrate on automating payments through a self-service portal. Customers may instantly pay bills, and check balances, modify subscriptions, and update their data via online payment gateways. A more direct customer experience increases payments made on time. And as an increasing number of clients utilize your self-service payment gateway, your staff will spend less time authenticating and processing payments and handling inquiries.
When your organization relies on manual invoicing methods, creating and maintaining accurate, up-to-date data is challenging. Reporting might consume a team's time for hours or even days. Automated billing and payment solutions manage the difficult aspects of the reporting process to provide you with the required account payments in real-time data.
When establishing a payment process solution, reporting requirements should not be overlooked. Instead, create sophisticated dashboards that enable you to monitor vital KPIs and consumer data quickly.
All software and retail enterprises must digitize and use a well-organized automated accounting system. Financial volatility and uncertain conversion rates are inherent to each organization; thus, it is essential to implement automated accounting software to maintain a steady cash flow and accelerate the billing process. Utilize an automated financial system to save substantial time and invest it in thorough planning and business strategy implementation.
The optimal payment automation system may ultimately depend on a business's needs and desires. Possibly, they desire a powerful, internally developed on-premises solution at any cost. Or they may require the most basic SaaS solutions.
Regardless of its form, every business owner must prioritize an account payable automation solution for business growth.
Contact our payments team today to learn how VoPay can deliver the payment flows and processing you need to ensure you can scale up in today’s business environment. Schedule a demo and learn more!
