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 e-payments are proving to be essential for a simple, swift, and secure payment pipeline that ensures business continuity.
Why businesses are hesitant to implement e-payments
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 the slow adoption of automation and e-payments has been the belief that their current payment methods are working just fine.
While that may have been the case just a few short months ago, the COVID-19 pandemic has likely challenged this belief for many companies. As companies and finance departments have shifted to work remotely in light of the stay-at-home order, many have experienced difficulties with business continuity and cash flow. In a recent survey that polled leadership in 500 U.S. companies, only 37 percent actually had the necessary technology to enable employees to work from home, and only 54 percent felt equipped to continue paying their bills while working remotely. The survey further went on to say that of these 500 companies, 12% said they wouldn’t be able to make any payments.
Additionally, 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 e-payments 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. Improves business continuity in crisis and emergency situations
COVID-19 tested the business continuity plans for every company in the U.S. Having the capability to process and pay invoices, as well as perform other crucial AP tasks from anywhere has become crucial. After the recent crisis, companies have concluded that automation and the ability to process payments and invoices from anywhere is no longer a nice addition, but a must-have for maintaining business continuity.
AvidXchange provides a comprehensive solution to manage the full invoice to the payment process so businesses like yours can increase efficiency and eliminate paper – whether employees are plugged in at their desks or working from home.
2. 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 e-payment 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 invoice and payment information in an easily accessible portal. With AvidXchange, financial leaders can easily access historical payment information and customized reports to make better-informed decisions more quickly. The best part is that they can access this information from anywhere at any time even if they work from home.
3. 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. By automating the payment process, businesses can dramatically simplify and reduce the time involved in paying their bills.
Once you send AvidXchange a payment, our team of over 400 supplier services teammates work to determine the suppliers that are already a part of the AvidPay Network. If the recipient is one of our 500,000 existing suppliers, we send their payments immediately via their preferred payment method in our database.
4. Most suppliers prefer to be paid electronically
Most suppliers are ready to welcome the accounts payable digital disruption, especially if e-payments mean quicker cash flow. In a recent supplier survey about e-payments, 82% 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 shouldn’t be ignored. In fact, according to Jess Scheer — executive editor of the Institute of Finance and Management, “Companies have wondered when the right time is to pull the trigger on automation, but the issue is no longer having automation as a nice-to-have. It’s now the cost of doing business for an organization.”
Additionally, 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. Not to mention, adopting versatile solutions like AP automation and e-payments could allow you to maintain business continuity without a hiccup in cash flow.
AP automation with AvidXchange
AvidXchange is transforming how growing organizations pay their bills by providing industry-leading AP and payment automation. We offer a combination of services and technology that helps organizations
streamline their AP workflows and easily pay their suppliers while removing manual tasks and paper from their current processes. Our invoice-to-pay solution integrates with and complements your existing financial accounting or ERP solution so you can automate your entire AP process without giving up an ounce of control.
Looking to scale for growth?
It’s not too late to start building, implementing or strengthening your own business continuity plan. Learn how payment automation can help you eliminate risk-prone, inefficient payment processes, and more easily pay bills in AvidXchange’s latest eBook, The Surefire Way to Increase Efficiency and Cost Savings with AvidPay.