Improve Cash Flow in your business ecosystem with Accounts Payables automation
- Posted by: David Watters
- Category: Best Practices
We all know the saying, cash is king and in the current environment where making a dollar is so much harder than saving a dollar – cashflow has never been more important for organisations. Accounts payable automation is a very useful lever that organisations can employ to help manage their cash flow.
Let’s dive into a few of the ways in which you can improve cash flow in your business ecosystem with Accounts Payable automation.
Improve cash flow visibility
One of the important benefits that AP automation can deliver is getting visibility into invoices that have been received in the system but have not been processed for payment yet. This gives organisations a much better view on upcoming liabilities and when they are due, giving organisations the opportunity to plan ahead and potentially negotiate delayed payment terms with specific suppliers where required.
Lower your cost to process an invoice
AP Automation can help free up staff from manual data entry tasks and through digitisation streamline the invoice coding and approval process as well. These efficiencies combined can lower your costs to process each invoice saving you money.
Take advantage of early payment discounts
One feature of AP automation is the ability to capture early payment discounts, gain visibility over when an early payment discount is available and ensure that you capitalise on it leaving you with more cash in your pocket.
Avoid Late Payment Fees
Avoidable late payment fees are a real kick in teeth for organisations as they are usually down to documents going missing, invoices waiting for approval or being sent to the wrong part of the business and getting stuck there. AP Automation gives you full visibility and control of where your invoices are in the process and you can identify invoices that are close to the due date and rush them through to ensure you don’t have to pay those pesky late fees.
Greater insights into your supplier base
AP Automation platforms typically have great reporting capabilities which means that you can run on-demand reports on spend with a supplier and using basic GL coding get an insight into what you are buying from the supplier and how much you are spending. This becomes vitally important when looking at renegotiating contracts or looking to consolidate spend with a smaller group of suppliers giving you the basic data to negotiate better deals.
Avoid manual errors or worse
It’s no surprise that when staff are required to do lots of manual data entry that mistakes can happen, this could result in over-payments, under-payments or delayed payments to suppliers to correct the data. This all results in extra effort and money to process your invoices as well as the possibility of overpayments and late fees.
There is also a possibility of getting caught up in a sophisticated invoice scam. According to MineralTree, 68% of executives reported that they had received a fake invoice or experienced some other attempted form of payments fraud. AP automation eliminates invoice fraud, utilising set digital approval workflows and automated data checks. Ensuring that your hard earned business revenue is spent on legitimate purchases.
Accounts payable automation that drives costs down and charged on a pay-as-you-go model is available to businesses of any size.