There is also the financial toll on a company’s overhead even if their vendors are paid on time. All of the paperwork and the multitude of invoices and printed checks often cost money, and that can consume a large portion of a business’s budget. Companies probably pay a vendor to supply them with paper that they use to pay bills with checks. It is a cycle that can negatively impact your bottom line. Industry research shows that it normally costs $22 to manually process an invoice. A company with numerous vendors will see that total quickly add up over time.
There are many types of payment system that companies can select. Ideally, a company may adopt such a platform to save money in the long term and potentially automate their accounts payable process. Paperless invoicing can possibly reduce a company’s overhead. Companies that have adopted paperless invoice processing typically enjoy a cost savings of nearly 50 percent.
The best online payment processing in the industry often accounts for these issues. Not only can an online payment platform possibly help a business reduce their overhead by simplifying vendor payments, but it can help the company leave a smaller paper footprint when it comes to environmental matters. While the types of online payment methods best for your business may vary based on your needs, with AvidXchange, you may be able to streamline your own accounts payable process while using less paper.
AvidXchange could make it more straightforward to automatically complete a bill payment to suppliers. That way, accounts payable teams can focus on other tasks related to running a department. Automating bill payments is essential because it can help expedite payments, reduce invoice processing time, and even possibly decrease some of the costs associated with excessive paper, stamps, envelopes, and postage.
AvidXchange could also aid in making the process of converting a company’s accounts payable to an online bill payment service as seamless as possible. AvidXchange allows invoices to be scanned into the system where an accounts payable team can receive, track, and approve them.
Optical character recognition (OCR) software can extract information from an invoice once it is scanned. After the invoices are scanned, they will appear on the platform’s dashboard. From this one location, users may be more likely to promptly move invoices to the next step needed for payment and review the invoices according to the provided receipt or purchase order to ensure that all the information provided is accurate.
Moreover, this software may allow an accounts payable department more transparency over the online payment process. The automated platform may also reduce human errors, time spent on accounts payable tasks, and the volume of paperwork required. Most importantly, vendors may also be paid without much hassle.
Of all the available online payment services, an accounts payable team will ideally seek one that addresses its most pressing concerns when it comes to paying outstanding bills to suppliers. For example, some businesses may aim to reduce their payment processing time from a whole week to just two days. These needs typically span industries. Many industries from health care to banking to advanced technologies can likely enjoy the savings potential that paperless invoice processing has been known to provide to businesses.
Types of Online Payment
How vendors are paid is just as important as when they are paid. AvidXchange may make paying vendors a more simplified process by allowing businesses to make payments to vendors based on their vendors’ preferences, with numerous types of online payment options available. The list of online payment methods include Mastercard or an AvidPay Direct payment, an enhanced direct-deposit option. Regardless of the online payment options selected, online payment methods generate rebates for the company. Such payment options may be more secure. Moreover, online payment services may be able to make the process simpler and more streamlined from start to finish.
A company’s accounts payable team can choose payment selections from their accounting system. Payments are then transmitted to the e-payment software application and the payment process begins. They can also be sent to a designated approver as determined by the accounts payable workflow.
The user remains in control of approving the payments to be issued. They can also track these transactions with a user-friendly, cloud-based platform. As a user, you will receive files with all the automated payment information your company needs for reconciliation. Thanks to this digital platform, you may not need to keep a file cabinet full of paperwork that simply occupies space. The average office employee spends approximately 500 hours each year looking for information kept in file cabinets. Companies may eliminate that costly and unnecessary time sink by employing an electronic payment system for their invoice processing needs.
Online Payment Systems
Performing accounts payable on an electronic payment system may potentially save time, money, and physical resources. Companies that have automated their AP process may also be able to gain a greater sense of security when they opt for a potentially safer platform via online payment systems.
When a company suffers payment or invoice fraud, they might lose money or customers or even experience a decline in their reputation. All of these factors can prove difficult for a business to overcome.
According to one survey published on our website, most payment fraud occurs through email compromises. The primary scam involves a criminal emailing an employee and pretending to be a higher-up in the company. The criminal requests the employee approve a payment. The employee, not wanting to disobey a superior, approves the payment request without question. As a result, problems may ensue.
Another survey found that paper checks remain a popular method for criminals to use when attempting to commit payment fraud. A company’s financial information, like account and routing numbers, are found on checks. This is information criminals would be most interested in obtaining so that they may gain access to a company’s bank accounts.
When businesses wish to reduce the security risks associated with paper checks, they can switch their accounts payable process to automated systems that may reduce instances of fraud. Online payment platforms may decrease fraud risk by reducing the number of paper checks cut and by increasing both visibility and internal controls. Controlling who approves invoices and tracking the payment process every step of the way are two features of automated invoicing that could mitigate a company’s fraud risk.
A company’s finance department can refer to their online account if someone contacts them to request a payment. Payments can be tracked in case a criminal poses as a vendor and attempts to get a payment from the company. With online payment systems, there are as many ways for a company to protect themselves against fraud as there are for criminals to rip businesses off.
Payment Methods For Businesses
AvidXchange can complete bill payments according to a supplier’s preferences, which can be beneficial, since different payment methods for businesses may vary from one company to the next. This includes Automated Clearing House (ACH) transfers. ACH is a method of payment where money is transferred from one bank account to another online. However, the bank accounts must both be in the United States. Fifty-six percent of business payments are ACH, and this number is constantly rising. ACH transfers can alleviate the worries associated with misplaced paper checks and disbursement speeds.
Of all the types of online transactions, ACH transfers are typically both the most secure and easiest. Paper checks expose bank information each time a new check is written. If a check also gets stolen or lost, this valuable information is free for anyone to misuse. ACH transfers move money straight from one account to another. Due to their ease and security, ACH transfers often top the list of bank payment methods in the United States.
Companies who use the ACH transferring service are responsible for verifying their account information. This security measure makes sure the company’s payment information is correct and protected. There are several ways to verify this information before processing payments. The ACH Validation Test is a popular option. This test sends a negative transaction to the bank to confirm the company’s account information.
All ACH accounts must be verified by the National Automated Clearing House Association (NACHA). Any company or party that is verified must abide by the rules and regulations set forth by NACHA. This adds another layer of security to online payments.
The best ACH payment processing systems allow vendors and utility providers to still be paid by a paper check if they choose. AvidXchange offers a range of options for payment methods.
Online Payment Software
The best online payment platform is one that offers the most user-friendly, flexible experience that it possibly can, with the goal of streamlining everyday accounts payable processes. Businesses often find themselves in a fast-paced environment that requires adaptability and resourcefulness. A finance team may be able to perform a variety of accounts payable functions using a system like AvidXchange’s online payment software, from either a desktop computer or a smartphone. Approving, tracking, and submitting payments to vendors may be completed digitally, with little need for paperwork.
Additionally, online payment software like AvidXchange that offers cloud-based functionality can be safer and more secure than traditional, manual invoice processing methods. This is because online payment software tends to keep essential information in one, centralized location where it can be viewed and handled from any device and at any time.
As long as the user has a working internet connection, they can use one of the more intuitive online payment apps available on today’s market to maintain their accounts payable workflow to ensure their vendors promptly get paid the correct amount. They can gain a better grasp on their company’s financial future from their office, home, or any place in the world.