5 Game-Changing Benefits of AP Automation Solutions

Automating and standardizing invoice processing is at the top of the agenda for most accounts payable departments this year.

The primary operational benefits of automating the approval and posting of supplier invoices are well-documented. For example, it increases staff productivity, reduces processing costs, and results in better accuracy and greater control over supplier payments.

But AP automation solutions also deliver game-changing strategic benefits.

Here are five ways that using an AP automation solution to process and post invoices will empower your accounts payable department to deliver greater value to the enterprise in 2020:

 

1.  Capture more early payment discounts

Accelerating the approval and posting of invoices received from suppliers creates more opportunities to capture rich early payment discounts. Suppliers are eager to accelerate their cash flow.  And buyers capture an average 2 percent discount per invoice, which adds up fast.  Sixty-four percent of best-in-class payment operations efficiently capture early payment discounts, according to Ardent Partners.

2.  Provide suppliers with an online self-service portal

Cash flow analysis and liquidity management sit atop the list of functional priorities for CFOs. However, poor visibility into the status of payments makes it extremely difficult for CFOs to effectively manage cash.  The self-service portals built into leading AP automation solutions improve cash forecasting and planning by providing the CFO of a supplier’s organization with real-time, on-demand visibility into the status of customer payments.  As a result, self-service online portals are an invaluable tool for attracting and retaining key suppliers and gaining leverage during contract negotiations with suppliers.  Forty-six percent of best-in-class payment operations provide suppliers with a self-service portal, Ardent Partners reports. 

3.  Implement a supply chain finance program

Businesses want to reduce DSO – a calculation of the time it takes to collect receivables. This is especially true of small and mid-sized businesses that may not have ready access to a bank line of credit.  Supply chain financing speeds payments to suppliers without impacting a buyer’s balance sheet.  Suppliers benefit from improved cash flow.  Buyers reduce supply chain risk and typically share in the fee received by the third-party that finances the transaction.  But none of this is possible unless buyers can approve invoices fast enough to meet invoice due dates.  That’s where AP automation solutions come in.  Twenty-seven percent of best-in-class payments operations have a supply chain finance program, Ardent Partners finds.

4.  Provide rich remittance detail to suppliers

Accounts receivable departments are eager for ways to streamline cash application. Imagine the leverage you can gain with suppliers at the negotiating table by providing them with the rich remittance detail they need for effortless posting and reconciliation.  Leading AP automation solutions are aligned with payments providers that create and deliver remittance detail.  Fifty-five percent of best-in-class payment operations provide remittance detail to suppliers, Ardent Partners reports.

5.  Process invoices straight-through

Manually processing invoices results in higher costs, more errors, slower cycle times and less visibility and control across the invoice lifecycle. AP automation solutions enable organizations to approve and post more paper and e-mail invoices straight-through, without the intervention of a human operator.  As a result, highly automated organizations – such as those that use an AP automation solution – can process a single invoice for less than one-quarter of what it costs their peers with little or no automation for processing invoices.  Forty-six percent of accounts payables operations process invoices straight-through, according to Ardent Partners.

The enterprise value of AP automation solutions is too great to ignore.

 

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Edenred Pay, an Edenred Company, is the global leader in invoice-to-pay automation. Our integrated platform connects businesses with suppliers, ERPs, banks, FinTechs, and payment rails to automate, optimize, and monetize the entire B2B payments lifecycle – from invoice receipt through payment reconciliation. Edenred Pay’s efficient, integrated solutions create a frictionless process and help deliver value to the enterprise by enhancing visibility and monetizing AP.

Visit www.edenredpay.com or contact us to learn more.