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Four Ways Automating Accounts Payable Increases Command Over Cash Flow

“It’s not what you do, it’s how you do it.” – John Wooden

Most businesses still haven’t even realized it, but paying the bills on time is now table stakes. AP teams are currently looking at bigger opportunities that involve moving their entire company forward by automating accounts payable.

This idea is grounded in the fact that manual invoice processing and payments have remained the status quo for too long, and now accounting teams are holding their company back from a variety of benefits that come with a forward-thinking approach to AP with automation. Automating accounts payable drastically increases your accounting team’s command over cash flow, and in turn increases visibility into every payment. Benefits of this increased visibility include working capital benefits that accounting managers probably haven’t even had time to think about.

Here are four tangible ways that this happens:

1. Automatic payment scheduling enables optimal timing

On-time payments are crucial for a lot of reasons, but we are past the days where this is the ultimate goal. Businesses of all sizes, from Tesla to Community Food Bank of Eastern Oklahoma, are rapidly recognizing the opportunities that exist to capitalize on advantageous vendor payment terms. Automating accounts payable makes this even easier with automatic payment scheduling.

Automatic payment scheduling takes the overwhelming burden of simultaneously tracking dozens of payment deadlines with spreadsheets off the shoulders of AP staff. By providing a “set-it-and-forget-it” functionality for approved invoices, AP managers can re-dedicate time and attention to building a strategic approach to each vendor payment based on each vendor’s unique payment terms.

Aside from the fact that no payments will be late, AP managers can also ensure their company is hanging on to large sums of money owed to vendors for as long as possible. In addition, they can also guarantee they are cashing in on every early-pay discount that vendors are willing to offer.

2. Easier access to commercial cards delivers cash-back rebates

Commercial cards aid short-term cash flow with cash-back rebates, and also provide working capital extensions available through their credit line. In spite of these benefits, MineralTree found that one-third of businesses are rarely using corporate cards as part of their B2B payment system.

Among the leading reasons for not using commercial cards is the notion that the credit card payment process is too cumbersome. First, it takes time to dig in and uncover which vendors accept your commercial card. Then, when it’s time to pay an invoice, paying by card requires a separate login credential and is a whole process of steps in and of itself.

By automating accounts payable, all of this friction goes away. Leading AP Automation providers like MineralTree can run vendor match reports for you, so you can know every one of your vendors that accepts commercial card payments. Then, when it’s time to make a payment, paying by card (along with any other method) is as simple as a few clicks.

Making B2B payments with a credit card through an AP Automation platform can quickly transform your accounts payable team into a tactical profit center.

3. Increased visibility into early-pay deadlines boosts your bottom line

As previously mentioned, early-pay discounts are not always the optimal approach to paying vendors. However, it is always helpful to know what early-pay discount opportunities exist. This knowledge helps you ensure you are optimizing your business’s short-term cash flow.

By automating accounts payable, you can gain complete visibility into every early-pay discount you qualify for, as well as when those deadlines are approaching. In fact, this information is built into your vendor payment process so you are seeing it every time you process and pay an invoice.

You can see an example of how this process works in MineralTree here:

4. Centralized invoice and payments processing prevents time-consuming error reconciliations

What diminishes command over cash flow the most could very well be the disorder inherent in a decentralized AP process. If invoices are getting paid from multiple locations simultaneously, it is very easy for the same invoices to be paid twice. These erroneous payments trigger the need for duplicate payment reconciliations, which vacuum up valuable time that accounts payable managers could spend focusing on elevating AP to a strategic level.

Automating accounts payable ensures that these costly mistakes never occur. Not only should leading accounts payable automation solutions offer features like Duplicate Invoice Detection, but they should also centralize the entire AP process across all office locations into one central online workflow.

By minimizing errors, you are minimizing time wasted fixing those errors, and unlocking more time to focus on building the optimal vendor payment strategy.

Curious to see what your AP process looks like with automation? Contact MineralTree for a personalized demo!


Scott Siegler
Scott is the editor of MineralTree's Invoice-to-Blog, and also the curator of The Proper Payable, a weekly email newsletter covering the best (and worst) in financial strategy.


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