Integrating software for your finance team may be a daunting task. In this article, we establish a 5-step framework to help with your decision.
10 Finance Problems a Payment Management Software Can Solve
Mistakes can arise no matter how detail-oriented your AP team is. Enable your team to be more productive and efficient with a payment management software.
Your accounts payable (AP) team has a vital role in meeting expense obligations. They are responsible for maintaining good relations with your vendors by ensuring that all payments are duly paid and accounted for. They also maintain your business's liquidity and ensure that cash flows close positively.
However, they are also human and prone to error. Mistakes are bound to happen even with the most diligent team members. You can help them with a payment management software (PMS), enabling them to be more productive and make fewer mistakes. Here are some common problems and how PMS can aid with them.
10 Common Problems for AP Teams (and How a PMS Can Solve Them)
Your accounts payable team has several tasks on their plate but little time to tick them all off. Give them more time to work on other functions with an effective payment management system.
1. Tedious data entry
Your team may be dealing with a stack of vendor invoices, especially if your business handles many suppliers. Manually inputting them one by one may lead to incorrect calculations and transactions.
A payment software has a vendor management database that helps you switch to a paperless process, enabling your team to easily pull up the correct vendor details.
2. Misplaced invoices and purchase orders
Purchase orders and invoices help you track what you've ordered and the agreed-upon terms, including amount and due dates. These can get lost in the shuffle of paperwork without you knowing as more come in, only realising it when a vendor calls you and you've already incurred late fees.
The digital storage features of PMS can help you avoid late fees by storing all essential documents in the cloud. This way, you won't lose any invoices or purchase orders, enabling your team to pay on time and know where your money is going.
3. Inefficient payment processing
Approval of invoice payments can take a long time if it has to go through several hands. Paper-based and manual processes may cause your business to fall behind in payments and set off a chain reaction that can hinder you from getting favourable payment terms with your vendors.
Workflow automation via a payment processing system can save time by accelerating the approval process. AP teams quickly get the green light to process payment once the terms have been validated.
4. Long hours
Manual and paper-based processes make data entry time-consuming and tedious. Possible entry errors can even add up to the time it takes to complete invoices since you'll need to look for those mistakes in the spreadsheets.
Save countless work hours by automating your accounts payable using PMS. This bill payment software can minimise data entry errors and import digital invoices, improving quality, speed, and accuracy. Your team can pay for the deliverables without missing a beat.
5. Duplicate payments
Human error can lead to duplicate payments and restrict your cash flow. For example, someone from the AP team may forget to mark an invoice paid or enter the same invoice twice. This can spell trouble for your business's finances, as it may take longer to retrieve the double payment.
PMS is a more reliable tracking system than an excel spreadsheet. It gives you a full view of the AP process and a heads-up when the payment has gone through.
6. Refund processing
Monitoring your business payments in a spreadsheet increases the risk of erroneous payments. A lot can go wrong with manual data entry, not to mention running the risk of typing the incorrect account number and sending money to the wrong bank account.
You can avoid this situation altogether with a payment processing system. It automates data entry by scanning your invoices upon uploading them, ensuring that the payment software gathers the correct information on the invoice. However, in the off-chance that you require a payment refund, SaaS companies typically provide top-notch customer support to help you retrieve the misplaced payment.
7. Unauthorised payments
Cases of employees circumventing AP processes happen due to slow approval times, especially when employees need the purchase to continue operations. A payment software automates the process, enabling a faster turn-around time for completing payment and avoiding the misuse of company cards and unauthorised transactions with unaccredited suppliers. It also reduces your AP team's time investigating an expense without an approved purchase order.
8. Fraud Prevention
Scammers are getting better with their modus as technology advances. They can already employ authentic-looking emails for invoices and payment requests, which businesses can easily fall for. That is why you need to make sure that everything checks out.
Three-way matching has become more efficient as the PMS stores your purchase orders, goods receipt notes, and invoices in one place. You can easily cross-check the invoice emails you receive and ensure that your purchase orders arrive unchanged.
9. The monthly dilemma of closing the books
PMS enables your AP team to close books quickly and generate financial reports for monthly financial check-ups. Typical AP payment processing software integrates directly with accounting systems, automating the expense reconciliation process and reduces the number of hours needed to adjust entries and close books at the end of each month. You will have an easier time regularly updating your books without worrying that an expense is left unrecorded.
10. Confusing payment methods
Using a bill payment software for your business allows you to pay for expenses in just one app. It consolidates all your expense data into one software providing complete visibility over all payables so you won't miss out on a transaction. Most payment management software makes online payments accessible to businesses, allowing them to process all their payables in the same dashboard. It saves you costs from overseas transfer rates since it provides you with multiple local and international payment options.
Automating Your AP Processes
Your AP team has several financial obligations to meet, so your company maintains liquidity and profitability and achieves a positive cash flow. But handling so many vendors with little time and the right tools on their hands can take time away from other crucial tasks. The right payment management software improves your business's financial processes and accelerates growth.
Streamlining your payment management process has never been easier! Spenmo is an end-to-end payables software that brings internal spend management, corporate cards, automated bill payments, approval workflows, and accounting reconciliation into an integrated view.
Book a demo today and learn how to enable your AP team to do more!