New FinTech trends are constantly emerging. This can make it difficult to determine which ones are necessary and which are simply “nice to have.” But as businesses begin to scale for growth and eliminate paper, automated bill payment software and ePayments are proving to be essential for a simple, swift and secure payment pipeline.
Why Businesses are Hesitant to Implement ePayments
Businesses are hesitant to automate for a handful of reasons. Some believe it reduces visibility and limits their control. Some worry about damaging the supplier-buyer relationship and believe suppliers prefer to be paid only by check. But the main culprit for slow adoption of automation and ePayments is the belief that their current payment methods are working just fine.
The problem with what’s working “just fine” for now is it could cost a company in the future. Consider the average cost to manually process one invoice is $11.57, compared to an automated cost of $2.52 per invoice.1
How AP Automation and ePayments Can Help Your Business
Now, consider that cutting costs is just one of the ways automation can benefit your business and enhance your relationships with suppliers.
1. Provides better visibility and control
Pairing electronic payment systems with accounts payable automation streamlines the payment process from beginning to end. In fact, the number one reason many businesses are adopting faster ePayments methods is the increased convenience for employees. Simplifying the accounts payable process allows them to focus on improving strategies and analyzing financial data instead of chasing down invoices they can’t find.
It also affords them increased visibility and control, because automated systems store tons of invoice and payment information in an easily accessible portal. Therefore, financial leaders can easily access historical payment information and customized reports to make better-informed decisions more quickly.
2. Enhance the buyer-supplier relationship
Just like your business focuses on the bottom line, suppliers are counting on payments to effectively manage budgets and avoid debt. If your organization relies on manual invoice approval workflows, there’s a good chance the approval lag time and lack of visibility make it difficult to pay those suppliers on time.
Thankfully, the number one benefit from an AP automation solution is quicker invoice approvals, which helps reduce late payments. In fact, 13% of surveyed PayStream Advisor respondents say the biggest benefit of AP automation is the reduction in late payments and interest. Take that a step further with ePayments on the backend of invoice approvals, and all of a sudden your suppliers can be paid almost immediately.
3. Most suppliers prefer to be paid electronically
Most suppliers are ready to welcome the accounts payable digital disruption, especially if ePayments mean quicker cashflow. In a recent supplier survey about ePayments, 82% of said they are “likely or are very likely to accept” a new method of payment from buyers. In fact, 72% of respondents said they would prefer being paid electronically (via ACH or VCC).
While it can be difficult to sift through fads and trends in the emerging Fintech landscape, AP automation definitely shouldn’t be ignored. It will allow your business to be more efficient, pay suppliers instantly and ultimately enhance your supplier-buyer relationship. Always remember— helping your suppliers increase their bottom line will also increase yours.
1 2018 ePayments benchmarks