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Speed Up Your Payments with Automated AP
For many companies, a major pain point in their accounts payable processes is the fact that it often takes a long time for check transactions to go through.
Just quickly examining the labor-intensive process of using checks for B2B payments can highlight the inefficiency; AP controllers have to get approval for a payment from the appropriate parties, then print, sign and mail paper checks. From there, the checks must travel via post before being delivered, received and processed by the other companies, then finally deposited. At its fastest, this is a process that can take several days at least, and it’s being rendered antiquated in the otherwise instantaneous world of online transactions.
Yet beyond it simply seeming old fashioned, manual AP offers companies less flexibility and insight when it comes to their overall finances.
Why Automating Makes AP More Efficient
Companies that transition to using accounts payable automation software instead of the manual processes they’ve likely been using for decades tend to report a number of bottom-line positives. One of the most commonly reported benefits is how much time is saved throughout the AP process – at least several man hours per week, but often more depending on the volume of invoices and payments being processed. This is particularly true when it comes to checks.
Automated AP can take B2B payments online in a number of ways, such as ACH, standard card-based payments, or the more secure virtual card transactions, all of which can be processed in far shorter periods of time than a check. Automation also makes payments easier for companies to track, and reduces the likelihood of checks being lost in the mail, intercepted, stolen, or other possible threats.
Furthermore, an automated process potentially makes every AP action surrounding those payments – from eliminating the need for manual invoice processing and data entry to creating one-click approvals so the proper parties don’t have to devote a lot of time to each transaction – go a lot more smoothly and quickly as well.
Keeping Up with the Jonses
In addition to the internal benefits that comes with switching to automated accounts payable, it’s also important for any company still relying on manual processes to think about the future. A recent survey from the Credit Research Foundation highlights that while checks are still used for half of all B2B transactions, that number is likely to fall to only about 1 in 3 by 2020. Meanwhile, ACH and card-based transactions are expected to grow to a combined 57.5 percent over the next few years, versus today’s level of 43 percent.
This underscores a critical message about automated AP and the modern market: Companies that don’t make the transition to automated AP in the near future may find themselves falling behind other businesses in their fields in terms of operational efficiency. MineralTree has already observed this perception, with data showing the executives that rate their companies and processes as “modern” automate at higher levels than less modern peers.
With these issues in mind, MineralTree specializes in helping companies assess their current and future AP needs, to determine the best strategies to overcome whatever payment hurdles they face. That effort can go a long way toward ensuring a strong footing for the future of business.
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