Vendors known as suppliers are an important part of the business.
Vendor payments (accounts payable/ invoice to pay) are the financial transactions your business makes with vendors who provided goods or services to your business.
Keeping up-to-date information about your vendor payments is the key to preventing liabilities that might arise years down the line. Your small business relationship with your vendors is what matters most.
In recent pandemic conditions when COVID 19 has hit every industry, it becomes essential for every manufacturer to maintain cordial relations with its vendors. The key advantage of strong, healthy supplier relationships is that suppliers are willing to work with you to produce better value for your business.
For example, Steel a major component in the automobile industry has registered a drop in demand due to the recent slowdown in the demand for automobiles in the U.S. The automobile manufacturers who maintain good relations with steel suppliers will get suitable prices for steel in these times.
The average U.S. business can pay hundreds of invoices each month, but there is no need to contend with the tedious manual process when you can use a more automated and time-saving solution.
If you are the business owner, you know the importance of vendor payments. These payments are a vital form of money movement throughout your company and its operations.
Payment automation tools can help businesses streamline invoicing, especially when these automated tools are integrated with back-office systems for easy access.
In this article, we are going to talk about the challenges faced by business owners in vendor payments and how automating vendor payments we can come out of the problems. We will also talk about how Star Software automation tools can help you resolve issues of vendor payments.
While making vendor payments, a manufacturer or business owner faces a lot of challenges.
As a CFO you face the problem of approving hundreds of payment invoices daily and need access to authorize the payment from wherever you are on any device. Moreover, you need to add additional persons who will be authorized to sign the checks leading to an increase in cost and fewer discounts from vendors. This ultimately leads to less cash flow. Isn’t it?
As an accountant, you face the problem of matching invoices with the check amount to know that whether the invoice is paid or not. Isn’t it? This sometimes leads to wrong payments and people start blaming you for the fraud taking place. Isn’t it?
As an account payable officer, you need to manually enter data of invoices, check for the payments received and also check purchase order and non-purchase order based invoices and make payments to get vendor discounts. The task is very tedious and mostly manual making it difficult for you. Isn’t it?
As a check-signing person, you need to match checks against the invoices looking at the date of invoice, and verify with the accountant that whether the vendor payment is done or not. Isn’t it?
The result of all these problems that every organization faces is loss of productive time, more cost involved in managing the documents manually, frauds in vendor payments, duplicate vendor payments, lost opportunity in getting vendor discounts as a result of a delay in payment, and above all spoil in vendor relations due to bad credit terms.
The manual vendor payment process has a lot of challenges as seen above. With the development of more robust backend systems, SMBs and large enterprises alike can use tools that automate the whole accounts payable process. Instead of sending invoices to customers for approval and/or payment in different ways, they can send invoices directly to a single system with automation built-in. This requires fewer people and leads to a more efficient operation.
While it’s smart to make sure that every invoice is legitimate and not fraudulent, having a team of people fact-check invoices can create unnecessary delays. At worst, it’s an engaged bottleneck that increases the odds a company will face due to late payment or missed 2%-3% vendor discounts that companies often give for early payment.
As a CFO would you like to have the opportunity missed to get a vendor discount by processing the vendor payments late by not using vendor payment automation? Do you?
As an accountant would you still like to process invoices and payments manually leading to an increase in cost by as much as $12. Don’t you want to reduce the cost by as much as a mere $4 by using payment automation?
As an accounts payable officer don’t you want a streamlined process for vendor payments that will reduce the time, money to process, approve and pay for the invoices raised by vendors and reduce your manual tasks?
As a check-signing person don’t you want the time to again checking the invoices for the payment that be carried by you directly without having to ask the accounts payable officer and have several invoices piled up before you to be checked manually?
If it’s automated you can very well check invoices from the centralized system with a click and make payment faster.
AP automation helps businesses automate every phase of the AP and banking process. It enables you to work remotely and check invoices keeping the recent pandemic insight. It will eliminate the risk of any errors in invoice processing and frauds in vendor payments.
Also, accounts payable automation improves the productivity of accounting employees by reducing the time they take to manually process the vendor invoices and check for errors if any manually.
The biggest advantage of AP automation is that it helps in making fast payments to vendors through electronic payments or no-touch payment methods. This payment can be made remotely at a location away from the office also. Besides, it enables companies to identify that the payment is done by the authorized person only.
AP automation can be easily implemented with the present accounting software and ERP system. It offers the advantage of the integration of data among all the users who are involved in the accounts payable process. No external person can creep into the process without being authorized to see the data.
The biggest benefit of using AP automation is that it makes the vendor payment cycle short and fast thus helping businesses to maintain healthy vendor relations.
Star AP automation allows businesses to manage their accounts-payable effectively from scanning invoices to making payments to vendors using bank integration without having to stick to the conventional and tiring methods of compiling invoices.
Star Software AP 360 automation helps businesses automate every phase of the AP and banking process.
As CFO Star software AP 360 allows you to make vendor payments using a bank integration where you can directly authorize your bank to pay. This feature of authorizing your bank to make the payment to the vendor instantly can be done remotely also. The advantage is that it helps you in getting discounts from the vendors. The benefit is that Star AP 360 helps improve relationships with your business suppliers.
As an accountant, Star AP 360 automation offers data in the invoice to be uploaded into the ERP system while maintaining a copy of the original invoice available for the user. The advantage is that it helps accountants manage hundreds of invoices without any errors. The benefit is that it makes their work of invoice processing efficient.
As an Accounts payable officer, using Star AP 360 automation offers you receive and manage several PO and non PO invoices and extract data from them using OCR and AI. The advantage is that vendor payment approval consumes less time. The benefit is that using Star AP 360 automation eliminates manual data entry work errors.
Vendor payments are critical for the success of any business organization. Manual vendor payments make the business lose discounts and hamper the relations with vendors. The cost of making payments without vendor payment automation is thousands of dollars and that is error-prone. The number of man-hours wasted for manual checking invoices against payments also is thousands of man-hours lost in unproductive work.
Using Vendor payment automation tools like AP automation results in a faster vendor payment cycle and more employee productivity in work. The overall results of deploying AP automation is improved vendor relations and cost savings leading to improved business profitability.
Star AP 360 automation gives businesses an edge of 55 to 60% increase in supplier queries and 70% improved vendor satisfaction.
Overall businesses felt a 70% increase in AP efficiency after deploying Star AP 360 automation.
If you as a business owner feel that it’s time to use automation to make the vendor payment process streamlined, then Star Software is ready to help your business improve vendor relations.
Sounds interesting to you, then we can schedule a free consultation for you. Contact us here, and we will love to interact with you soon.
Star Software strives to provide integrated and innovative automation solutions to our clients by utilizing the latest technology, best practices and recognized industry standards through our knowledge and significant experience in the industry.