5 Steps to Moving Your Company’s Vendor Payment Process to Digital Solutions
The world is becoming more and more digitized, have you thought about making the switch to a digital vendor payment solution? Have you been using the more traditional accounts payable (AP) methods for the past decade? Making the switch is easier than you think.
Many businesses are in some stage of what is known as digital transformations, and redesigning their vendor payment processes from the old school traditional paper snail mail methods and evolve to digital payment provider solutions.
Why should you move to digital? Well, the benefits of moving your business to digital are vast and wide-reaching, which will affect almost every business unit from sales to hr to marketing. Organizations that are already doing it are feeling the benefits of saving time, reducing costs, improving speed and customer experiences. Digitally driven tools help sharpen your oversight, lower resource costs, reduce reliance on paper processes and payments, and decrease payment risk.
I would like to outline a few steps that a company can take to start to digitize their accounting processes, which especially pertains to accounts payable (vendor payments) systems. Automate and simplify your accounts payable process and Spend 50% less time on business bill pay. Outlined in this article our 5 things you company can do to make a smooth migration from paper to digital vendor payment solutions.
The benefits can include:
- Automate your approvals
- Always be audit ready
- Simplify bill pay
- Keep a digital paper trail
- Master your cash flow
- Pay with confidence
1 First is Learning how does it work
Before a company decides to change a process or adopt a new technology to get the best use or return on investment from it, you first should learn and understand why it would be helpful to make the switch to electronic or digital accounts payable vendor payment solutions. You may have a couple question relating to moving to a new process for vendor payments. What kind of hesitations or concerns do you have? Are you nervous that might lose control over the process? Will, your supplier and company data be protected? Doing a little research to understand how it works is helpful with moving forward.
To paint a picture of how digital vendor payment solutions work lets first examine what your existing or current process looks like. So how long does your hr or finance department take to handle and pay each vendor or supplier invoice? And even more importantly what does it cost your business in terms of time, wages, labor and materials.
If you want to get buy-in from your accounting department, you should share this information with them. It can get the ball rolling and motivate them to migrate and upgrade to a digital payment software vendor process. You should try to emphasize how doing so will reduce tasks without having to let them go.
2 start with a cloud-based vendor payment system
Similar to converting your accounting to the cloud, it is a relatively easy process for taking all of your paper files and converting them to a digital platform. There are several cloud-based accounts payable (AP) systems that provide ways to scan all of your paper bills, invoices to assist in tracking and keeping records of the previous payments. What is convenient is that digital vendor payment systems allow businesses to just email their invoices which provides easier tracking, more accurate record keeping and making the payment. If you use a cloud-based software system, any one of your employees who is responsible for this duty of paying your vendor invoices can achieve this from any device that is allowed to log in to the company’s system. Could be a tablet or laptop. This means vendors get paid faster, and it can help to cement better relationships with the suppliers, partners or individuals that provide valuable services to your organization.
3 Research and find a digital vendor payment solution with scalable features
So even the main part or service of a vendor payment process pertains to a payment and invoice or bill, there a few other related responsibilities that are important to a digital payment vendor solution.
Locate a software solution that also provides document management system for filing and keeping track of payments and invoice records. An ideal digital vendor payment system should enable workflow automation to lower work times and offer automatic audit trails to review any payment processes and vendor accounts. Keep in mind, that vendors can choose from different types of payment methods such as ACH or credit cards, eChecks. And mobile access and other integrations with other types of accounting systems such as Quickbooks also ensure that the digital (AP) process works smoothly within your company.
“Making the transformation to digital payment solutions will not happen overnight. Be ready to commit the time, careful planning and teamwork that digitizing the vendor payment process requires.” Tom Huckabee CPA
4 Take advantage of using automated workflows to secure digital vendor payment data and records.
If your company is currently using a paper vendor payment process, the workflow be sort of informal. Meaning, the process, or workflow for making sure the payment gets paid with the right decision makers signing off on it, the process may not be that secure to protect the information or speed up the payment processing time.
So in a more traditional vendor payment system, a business gets an invoice from a vendor and then a staff person who oversees the vendor payment process can confirm or deny the invoice amount. Then it gets sent to the accounts payable department person. If the invoice comes at a higher amount, it may have to be run by the CEO or manager to approve the new amount before it gets sent back to the AP department. May seem standard and simple right. What happens though when someone in that workflow process is out sick for a day. And there also is not an easy way audit those invoices to better understand how the workflow impacted the payment cycles and company performance.
That is why it is helpful and useful to take advantage of workflow tools that built inside of a digital vendor payment system. So when your employees and vendors learn to start using a digital vendor payment solution, the invoices move electronically through the automated workflow to get to the correct person. The system obtains the right approvals before moving the invoice onto the rest of the parts of the workflow system. With automatic tracking of workflows, it’s also possible to leverage an accurate auditing process.
5 Start integrating for optimized work productivity
Even though adopting a digital vendor system will speed up part of your accounting departments work, the next step is to increase productivity and help save your company more money by integrating it with other tools.
Because all accounts payable duties usually are part of an overall financial framework, its best to start with your accounting system. Integration can help avoid duplicate or double data entry, reduce any human errors, and maintain a more subjective view of your business’s financial performance and simplify the entire accounting process.
Research and look for other tools to integrate, including the payment processing methods like online and mobile bill payment solutions, business bank accounts security and identity verification software.
The transformation to digital payment solutions will not happen overnight. Be ready to commit the time, careful planning and teamwork that digitizing the vendor payment process requires.