As businesses grow, so do the amount of payments that they process. While the focus is often placed on marketing, mergers, and other strategies for growth, businesses tend to overlook how automating payment processes can also help them grow.
When businesses work towards improving their payment processing through automation and modern digital systems, they position themselves to reap the benefits that the technology offers such as positive cash flow, improved accuracy, and much more.
Using traditional manual methods for processing payments may work for businesses with a small number of accounts, but such methods don’t always effectively scale up when more customers and vendors come into the picture. Not only does this increase in payments lead to an increase of tedious work, but it also increases the likelihood of errors.
From streamlining tedious processes, to improving security, payment automation is a must for any successful business. While there are many advantages to payment automation, we’ll be discussing the top four reasons why your business should be incorporating payment automation into its business practices.
Reason #1 To Automate: Increased Revenue and Productivity
As mentioned, the more your business grows, the more payments your business will need to process. More customers lead to more invoices from suppliers, more paperwork, and more equipment, which all affect your business’s bottom line through higher payment processing costs and reduced productivity if manual processes are still kept in place.
With an automated payment processing system, however, businesses are capable of scaling up their payment processing for much less. Furthermore, with the growing popularity of online banking and shopping, the number of cash payments is declining. This decline has led to an increase in the popularity of e-payments, which your business can incorporate with an automated payment processing system and then use the feature to drive more sales.
The key to growing productivity and sales is to simplify processes that take a significant amount of time. If your accounts payable processing is automated, it opens the door for your business to sell more, which leads to an increase in productivity, and in turn, an increase in revenue.
Reason #2 To Automate: Improved Accuracy and Security
Manually entering invoice and payment data is not only a time consuming task, but it also opens the door for errors. Small errors such as missed numbers may not be detrimental to your business themselves, but it is the recurrence of small errors that go unnoticed that end up being costly.
According to the 1-10-100 rule, the cost of fixing an error is 10x greater than the cost of preventing it. With small errors most likely not appearing until the end of the month accounting, the probability of having multiple costly errors to fix within any given month is high.
Whereas humans are prone to mistakes from time to time the more manual a task at hand is, computer programs are capable of repeating them endlessly without fault. By automating your payment and invoice processing, you eliminate the chance of having payment errors disrupt your customer and vendor relationships.
Automating the process also streamlines the task, meaning less time will be spent focusing on tedious work, and more time can be placed on focusing on the customers at hand rather than a computer screen.
Electronic payment systems also give you access to technology that can better protect your transactions, such as offering fraud detection and prevention services.
Reason #3 To Automate: Improved Customer and Supplier Experience
Automation doesn’t fully take people out of the equation, but it does allow accounting employees to gain access to the latest technology to stay on top of orders, payments, and customers.
The easier the payment experience is for your customers, the easier it will be to turn first time customers into repeat customers. The reason for this is that a consistent customer experience that follows a uniform, simple process throughout all customer interactions fosters loyalty and trust. With 72% of customers saying that they would likely switch businesses after a single negative customer experience, it is important to understand how your processes as a whole affect your customers.
When it comes to any vendors or suppliers that you work with, automated processes also allow them to self-service with live visibility into the statuses of payments via a digital portal. Because of this, your business will be able to spend less time answering various questions relating to payments and simplify the supplier experience, which can also help foster favorable relationships.
Reason #4 To Automate: Save Your Resources
Manual data entry is tedious work that leaves your business vulnerable to errors, but it also comes with its own expenses. On the other hand, automating payment processing leads to an increase in productivity, which helps you save on valuable resources such as time and money.
Traditional cash and offline payments require a lot of materials and paperwork such as mailing materials and printing supplies. While these supplies are not overly expensive on their own, the costs can quickly add up due to them being required frequently. By switching to an automated payment processing system, your business can eliminate the need of buying such supplies, meaning it can spend the money on more important items.
Accepting digital payments is also cheaper and easier to do than traditional paper checks. According to Spencer Commerce, automated payments offer cost savings of 90% in account payable processing over manual processing.
As we continue through 2021 and begin to see a return to what was once normal, it is important for businesses to update their procedures in place to accommodate the increase in business that is forthcoming. To automate your accounts payable processing, consider incorporating a system like Denefits into your business.
Denefits is a free-to-use, complete payment solutions system that enables businesses to streamline their payment processing, gain more customers through guaranteed payment plans, and automate their billing processes. With Denefits, your business can easily begin automating its payment and invoice processing using ACH payments, which also offer your business additional security and protection against chargebacks.
When businesses take the time to improve dated systems, they position themselves to reap the benefits that come with modern digital systems. If your business has yet to transition towards automated processing, it may be time to do so.