Taking supplier payments from transaction to transformation

For businesses across all industries, improved accounts payable and accounts receivable processes can deliver efficiencies that drive growth. This growth comes from upgrading payment systems and processes to improve productivity and strengthen cash flow. However, despite the knowledge across many businesses that digitising and automating payment processes and systems delivers strategic and operational benefits, some companies still rely on manual, disjointed systems to manage their payment processes. Keep reading to learn how to improve your accounts receivable and accounts payable processes and how digitising these functions can impact growth.

Accounts receivable automation is a gamechanger

Australian businesses spend an average of 12 days per year chasing late payments. This time could be spent on more strategic tasks and implementing system and process improvements, especially those that encourage and incentivise customers to pay faster.

By using an integrated payment system and automating accounts receivable processes, businesses can:

• Provide customers with flexible payment methods and options, including debit and credit card payments, extended payment terms, and early settlement discounts.
• Gain better visibility over how and when customers are expected to pay, allowing the accounts receivable team to identify problem accounts sooner and make changes to reduce the company’s credit risk.
• Operate from a single source of truth for all data by integrating accounts receivable and payment data across the business’s other systems to reduce data entry errors and eliminate manual tasks.
• Attract and retain better talent by minimising the operational and repetitive tasks required in accounts receivable roles.

Automating your accounts receivable processes improves how invoices are viewed and paid between businesses. It can also help you get paid faster, strengthening your cash flow.

Turn accounts payable into a revenue-generating function

Today, companies spend about 520 hours per year on accounting and administrative tasks, including manually processing invoices and payment reconciliation. This equates to over three months’ worth of time for one person. Accounts payable systems and processes are some of the most labour-intensive. It requires matching invoice details with the company’s internal supplier records and other data, such as purchase orders. On top of this, there is a lack of visibility regarding the status of invoices. For example, once an invoice is entered into a system, it needs to go through different levels of approval. Almost half of businesses require two or three people to approve an invoice, while 22 per cent require six or more approvals. When a company automates and optimises its accounts payable systems and processes, the time taken to process supplier invoices is reduced significantly.

Further, more invoices can be processed when systems are digitised. When using manual invoicing processes, for example, one person can process around five supplier invoices in one hour. With a digitised system, supplier invoices can be processed in batches, requiring manual intervention only for those with errors or omissions.

Improving your supplier payments can improve your cash flow

Many accounts payable teams still use spreadsheets to track invoicing and payments. Spreadsheets are easily corrupted, not always accessible, and lack integration, which can cause errors, especially for businesses with multiple locations and banks and systems to reconcile. By making your payment processing touch-free, accounts payable functions become more strategic. This is due to the additional time people gain for strategic work when manual, repetitive tasks don’t bog them down. Further, the functionality offered by a robust accounts payable system equips accounts payable teams to:

• Connect their chosen solution to their existing accounting and ERP platforms
• Facilitate the ongoing conversion of the company’s suppliers to digital payment methods
• Get on-demand reporting and analytics for buyers and suppliers
• Manage payment reconciliation efficiently from a single source of truth for data

Operating your accounts receivable and accounts payable functions at their most productive not only leads to efficiency gains but also provides more time to focus on strategic, high-value work, ultimately driving growth. This growth is enabled by better visibility over cash inflows and outflows and the ability to align these over the long term.

Drive your business growth by improving payment systems and processes with Spenda

Automating your accounts receivable and accounts payable processes isn’t just about getting more done. Although this provides efficiencies, which have a range of strategic and operational benefits, having better visibility over how and when supplier invoices will be paid and when customer payments will be received provides more control over your cash flow. Implementing an integrated payment platform can give you the systems and process improvements you need to better plan for investments in growth. This also frees up people’s time to focus on the strategic work that drives the best commercial outcomes for a company.

Spenda is an integrated business platform that enables businesses across the supply chain to sell better and get paid faster. We serve as both a software solutions provider and a payment processor and deliver the essential infrastructure to streamline business processes before, during and after the payment event. Our connected platform displaces multiple disparate systems in favour of one collaborative solution that improves transactional efficiency between businesses.

Try Spenda risk-free for 30-days*

This article is for general information purposes only. Consult a qualified financial advisor regarding any changes to or decisions about your business’s finances.

*30 Days Free Promotion Terms & Conditions
By signing up, you are entitled to a complimentary 30-day trial of Spenda’s Accounts Payable and Accounts Receivable software. This trial covers only software usage fees and excludes invoice payment processing fees. Following the trial period, you will be given the choice to upgrade to a paid account or to delete your account. Monthly software fees start at $250 per month. Enterprise fees are available on request.