The accounts payable (AP) process can be especially challenging for B2B businesses. Any errors can result in increased charges and damage a business's reputation. Thankfully, there is a solution. An automated AP program offers multiple benefits for B2B operations. These benefits include lower operating costs, fewer accounting errors, quicker payments, and better vendor relationships.
Read more about how an AP automation solution can benefit B2B businesses.
Lower operating costs
AP automation can reduce operating costs in several ways. First, automated AP platforms may allow businesses to reduce the size of their AP departments. This can save companies a great deal of money they would otherwise have to spend on wages, benefits, and even payroll taxes.
While lower labor costs are the most significant cost reductions, there are other ways that AP automation can reduce operating costs. For example, an automated AP platform can send digital checks (ACH) instead of paper checks. This will save the business costs on paper, ink, and postage. Though it may seem like a small amount of money, it can still add up to thousands of dollars per month for a large business.
Fewer errors
While saving money is the biggest factor in many businesses switching to automated AP programs, the reduced number of accounting errors is also significant. Even the best accountants will make mistakes from time to time. These errors will cost time to identify and fix. Also, such errors can result in late payments. This can result in late fees and damaged relationships with vendors. AP automation platforms remove human error from the equation.
Quicker payments
Of course, automated programs can process invoices more quickly than people. This leads to a much faster AP process. Many businesses will offer discounts to companies that pay their bills early. While these discounts are often two percent or less of the total bill, an automated AP program will enable businesses to get these discounts consistently. This can save the company a great deal of finance.
Better relationships with vendors
All the other benefits of using an automated AP program combine to create a better relationship between the company and its vendors. Vendors will be happy when they get paid quickly and accurately. This could result in more favorable deals between the vendor and the company. A positive relationship between the company and its vendors will also enhance its reputation.
Easier collaboration between AP professionals
The accounts payable process can be more complex for a B2B company than for a B2C company. This is why AP professionals must work together to ensure they can process invoices quickly and accurately. This is difficult to do when processing invoices manually. AP departments that handle everything manually often require workers to meet with other members of the department in-person before they can move on with an invoice. This is very inefficient and time-consuming.
An automated AP platform allows accountants to send an invoice to an approver or authorizer without needing to hand them a paper copy or even send an email. As soon as they finish their work on an invoice, the automated system will automatically move it to the next stage in the process, which may involve sending the invoice to another department member.
Automated AP platforms even make it easier for accountants to communicate with one another. Those working on the same invoice can easily leave visible notes to other department members. This way they do not need to meet in person or even wait for a reply to an email.
Enhanced transparency
B2B businesses must have closer relationships with other companies than B2C businesses. B2B companies must be prepared to be transparent with their clients and their partners. It is also important for companies to be transparent with their shareholders.
Companies feeding manual invoice processes, always have a scope of financial fraud. No matter how fine they intend to be, loops are likely to cause revenue loss. Companies that use automated AP software will have detailed information about their expenditures, enabling them to be more transparent.
AP automation is the ultimate B2B accounts payable solution
Many companies out there claim to offer the best accounts payable solutions. Some of these companies specialize in payment processing, while others might provide accounting software. However, an automated AP platform is the ultimate solution. That is because these programs can handle multiple accounting functions with automatic solutions. This is quicker than using accounting software that needs to be manually controlled and is more cost-effective than outsourcing AP processes to a third party. Businesses looking to streamline their accounts payable processes should look into automated AP platforms that can integrate with other programs.
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