In the business world, a single little advantage can bring a lot of help. One advanced way to enhance the overall efficiency of a business is by switching to an automated payments system. Automated payment solutions can assist an enterprise in succeeding and achieving its business objective, but so can several other things. So why would a business use payment automation? What are the key benefits of automating the payment and reconciliation system for a business?
To obtain the answers to these questions, first, we have to know what payment automation is.
What is payment automation?
Payment automation is an integrated system that helps businesses develop computerized bill payments via an electronic payment system directly.
Payment automation solutions are related to developing the payment process quickly and efficiently for traders and their customers. As the number of online orders and transactions increases, a business faces diminishing the relevant operational costs. By adopting payment automation systems like batch payment processes and recurring bills, an enterprise can enhance its business while reducing payment-related admin costs.
Why is an automated payment system beneficial?
Faster time to convert into cash (cash conversion cycle):
The more automated and efficient an operation is, the quicker that payments can be gathered and that suppliers would get paid, which means cost savings from faster invoice process and more early payment discounts can be achieved. Suppose a payment automated system can help a customer to eliminate 95% of reconciliation-related data submission. Now imagine the advantages of freeing the hours of the related staff from entering data and re-checking whether the data is accurate or not.
Digital payments are reasonable and simpler to collect as compared to paper checks. Recent research shows that payment automation can assist in cost reductions of up to 80% when matched with manual or paper checks.
Errors in the payment processes waste the valuable time of the businesses, damage customer/ supplier relationships, and in the worst case, result in duplicate payments. Acquiring a trustworthy payment automation solution that authenticates data entry and points out exceptions can assist in a continuous improvement, eventually leaving the contention behind.
Instant financial close:
Payment automated system can assist in streamlining financial close with quick 3-way reconciliation. All payments are automatically checked against Enterprise resource planning software’s records, and reports are quickly integrated with ERP solution to offer a consolidated glance of accounts to the finance team.
By setting up an automated solution in a company, managers can restrict the users to authorized functions while at the same time ensuring invalid payments and invoices get red-flagged and reported timely. The automated payment system is important for all users who want to come first in the competition.
An enterprise can acquire more data to help advance payment analysis and upgrade reconciliation by opting for automated digital payments. Payment automation solution is becoming an enterprise’s strategic focus to assist finance personnel in managing better and foreseeing their cash flow.
Centralized payment Data:
The utilization of a comprehensive payment platform can help a business to avoid investing in numerous apps. Instead of them, dashboard becomes the highlight for payment lifecycle, helps business access revenue insights and have a closer look at customer lifetime worth, avg. Revenue/customer, and continuous recurring revenue.
An automated payment system allows companies to use self-service with real-time insight into transaction statuses through a digital portal, which diminishes time spent on answering against inquiries and improving links with suppliers.