When you are processing payments for different recipients in different currencies, the management behind the scenes in transactions can get out of the control quickly. This can hinder your business growth in a great deal.
The amount of manual work of the payment processing will take more and more of your team’s time and effort while reducing the efficiency and the accuracy of the process. Automating your payment process can deliver a solution to all your payment processing struggles once and for all.
Let’s have a look at what is payment process automation and how it can help you improve your organization’s payment proces.
What is payment process automation?
Payment process automation is automating your bill payments with an electronic system. The system enables to computerize all your bills, transactions and payment records offering you an integrated solution. Major role is playing your software solution provider to enhance the entire process to minimize the manual intervention.
This start at the purchase order level and it has a flow of transaction from the beginning with the underlining supporting and records. When an organization start with the PO, then it will be ended with the payment. In between this process organization face so many challenges to make sure what they pay is correct in terms of party, amount and to the extent purchases made. Many organizations moving traditional cash or cheque payment to digital method to minimize the errors and improve efficiency.
There are two ways entities can improve payment automation process.
1. Use existing channels
2. Software solution
Use existing channels
There are basic ways to automate your bill payments: through your bank, your creditors, and your credit card company. Automating your bills ensures that you never miss a payment or pay a late fee again. You’ll also save money on postage, envelopes, and checks. While you can delegate bill payment, you still need to monitor the situation. Errors can be time-consuming, frustrating administrative hassle to find and fix. Putting bill payments on autopilot is an attractive method of dealing with the necessary evil of paying the bills. It’s easy, effortless and (most importantly) free.
A) Through Your Bank
By providing the bank with information about all of the bills that you need to pay each month and authorizing your bank to pay them on your behalf, you can easily remove the stress from monthly bill payments. Under this option, the bank automatically takes the money out of your account each month and sends it to your creditors. This is good for fix amount payments on monthly or quarterly basis.
In a variation of this, you can use your bank’s online bill payment system. In this scenario, you set up a list of creditors that you can transfer payments to at the push of a button, much the same way as you would move money between your checking and saving accounts each month. It’s not exactly automatic, but it is relatively convenient and cuts down on the time and expense of using stamps and envelopes. It also provides control over the date that bills are paid, and the amount that is paid on them.
B) Credit Card Company
You can provide your credit card company with information about all of the bills that you need to pay each month, and authorize the company to pay them on your behalf. Many debit cards also offer this service. This is good for fix amount payments on monthly or quarterly basis.
This is relatively effective when you have more volume of payments for different vendors. All the flow will be managing your software at each phase. It initiating relevant section taking proposals to procurement, taking approval for proposals and raising LOPs. Then obtaining the services and goods recorded in the system with the documents and approvals from relevant parties in the organization. Then generating bulk payments for vendors though system and relevant approvals and checking the relevant documents in the system. Banks are interlinking to the software or adding payment merchants to the system is also available. There are number of payments chancels available and your entity can add them to the system with minimal transaction base payments. You may refer below services providers and most of them is available to add your software.
4. Flagship Merchant Services
5. Payline Data
This method relatively expensive as it has to invest in the system and adding payment channel also has cost element. However, today most of the medium to large companies use electronic process to improve efficiency in the payment process.
Reasons to automate payment process immediately
You could easily make sure your invoices are processed faster and more effectively than ever before. This will ensure that your suppliers are getting paid fast while enabling you to capture early discounts. Payment automation will also save you costs involved in cheques and manual processing.
You can save a significant amount of money with electronic payments when compared to paper cheques. According to researchers, it costs way more to processes a paper cheque than it compared to an automatic clearing house (ACH) credit transaction and card transaction. With payment automation, you can save all the paper cheque processing money.
Use of cheques is one of the most common payment methods of frauds. This has been an increasing trend year by year among those who are attempting or committing fraud. By using payment automation, you can avoid the use of cheques thus decreasing threats of payment frauds.
When you are dealing with many invoices and transactions manually, errors are inevitable. Duplicate payments, delays due to payment declines, missed payments are some of the few errors that companies are often experienced. When you adopt an automated payment process in your organization you can easily reduce the amount of manual work related to payment processing. Thus, you will be able to increase the accuracy and efficiency of your transactions.
Another benefit of payment automation is that it will allow you to have better visibility over your cash flow. An automated solution will enable you to track, monitor and manage your transactions right from your screen thus giving you a better ability to capture more clear financial data. The solution comes with advanced analytical tools as well which will help you analyze your payment processing data to understand and predict your cash flow better.
Improved supplier satisfaction
Payment automation makes your payment cycles shorter which your suppliers will be very happy about. The system will enable you to work on your invoices effectively regardless of the number of invoices you receive a day. Thus, your suppliers will get paid faster-decreasing sales outstanding and helping you build better relationships with your suppliers.
We can guide you through out your automation process. Please contact us through email@example.com