When most companies think about how they could improve their accounts payable (AP) processes, they think about AP automation. Your clients may ask you about AP automation, to take advantage of features like automated coding or easy inventory indexing.
But automated invoice processing isn’t just about the initial intake and data processing. It’s also critical to examine the final step in the process: how your firm is paying invoices for your client.
Many companies are transitioning away from paper checks and embracing electronic payment methods. Digital payments can reduce errors, improve vendor relationships, and also save you and your client money.
However, not all electronic payment systems are created equal. Even if your client is already using some digital methods to make payments, the functionality of a centralized electronic payment dashboard can transform a lot of time-consuming and error-prone AP tasks.
New electronic payment features can provide security, scalability, and even extra benefits, like cash back on prompt payments to companies across industries. Here, we’ll explore different options for electronic payments, and how these new systems can benefit both your firm and your clients.
What’s the Difference between Payment Types?
First, if your AP team is still cutting paper checks by hand, you are spending a lot of labor dollars and bandwidth on an inefficient process. Your team is writing or printing checks, getting physical signatures, stuffing checks into envelopes, adding postage, and hoping that the checks you send through the mail arrive on time.
With the various digital payment tools available today, that kind of traditional money management system is too time-consuming, labor-intensive, and costly, and it leaves wide open the potential for issues like check fraud.
In comparison, digital payments can benefit both you and your client, providing new efficiencies and security features. “Electronic payments” is a relatively broad category, covering different formats like ACH transfer, credit or debit card transactions, and virtual cards, but overall it refers to digital transactions that are made without physical checks or cash.
While all types of electronic payments are usually more convenient than manually cutting a check, some digital payment systems can add extra efficiencies to your AP department.
Say you pay most of your client’s invoices online via a corporate credit card — great! You are saving on the cost of printing and mailing checks. However, if your team needs to separately apply the electronic payment to every single vendor, going to various portals, emails and software, you may find yourself wasting almost as much time as if you were writing paper checks.
An electronic payment solution, as part of the AP automation system, can streamline all of these steps. A centralized payment dashboard simplifies various payment methods, allowing you to work from one platform while also still paying vendors via their preferred method. The efficiencies can transform your invoice payment process.
How an Electronic Payments Solution Can Impact Business Operations
Electronic payments can be more secure and better for your firm and your client’s business. When your back-office operations are centralized in an electronic payments solution, you amplify efficiencies and take advantage of new benefits.
Particularly if your client does business with many different vendors, a disjointed system of manual checks and different vendor portals can be time-consuming and create more touchpoints that lead to errors. A centralized payment solution offers features that can smooth out operations.
With a dashboard, your team has access to standardized and accessible documents related to an invoice record. Any communication about the invoice, whether questions about details or the approval process, is transparent to all users. These records include an auditable “bread crumb trail” that connects digital copies of the original invoice all the way to indexed records and payment details.
If there are any issues flagged or questions, you can message vendors directly from the platform. Rather than hunting down records in a separate system, then hunting-and-pecking out an email, you instead have a pre-populated email ready to fire that includes all the records and receipts that you need for easy correspondence.
For bookkeeping and accounting firms, a centralized dashboard adds an additional cushion that streamlines communication between you and your client. The system allows everyone to glimpse the status of payments, and see when funds are expected to be withdrawn. Whether your client is remote, or your firm’s team is working from home, you can collaborate more easily while still meeting payment obligations.
Vendor Payment Integrations
Your client wants healthy vendor relationships because those relationships can determine everything from delivery schedules to future pricing. Your digital payments system should support your clients’ vendor relationships. One common sticking point can be payments: are invoices paid on time, in the correct amount, and in the method the vendor prefers?
An electronic payment solution like Plate IQ’s VendorPay allows you to pay vendors on their terms, through their preferred method. For vendors with specific vendor portals, you can integrate your payments platform directly with their portal. Not only does this ensure you meet your client’s payment obligations, but it also minimizes the number of steps you have to take for all vendor payments.
If a vendor still prefers paper checks, a solution like Plate IQ can simplify your system by handling the printing and mailing. Through automated check processing, the check is printed and mailed for you, with just a few clicks of a button.
This streamlined system is especially beneficial for accounting firms, which typically need to coordinate with large numbers of clients and client vendors. With Plate IQ, you can pay over 180,000 vendors from within the platform. And if your client works with a vendor that isn’t currently in the system, our team supports onboarding and troubleshooting that vendor every step of the way.
Streamlined & On-time Invoice Processing
Automated approval workflows mean that you can speed up invoice processing and get “zero-touch” payments out on time.
An electronic payment system should allow you to create custom payment approval rules based on line-item invoice data. Especially if your client has multiple, busy stakeholders who may need to give approvals before you process payment, a custom system routes invoices automatically to save time and energy for your team.
Your electronic payment system can also act as a repository for up-to-date invoice information. If a team member has access to the platform, they can see the status of an invoice at any time. Questions can be communicated easily within the platform, allowing your accounting team to quickly answer invoice or approval-related concerns with all the related documents at hand.
Improved Data Visibility
AP teams handle large amounts of sensitive data. An electronic payment solution ensures this data is accessible across internal and client teams, thereby allowing the organization to plan for increased cash flow or upcoming payments.
Your team can view the payment habits of the organization in one place, taking into account historical data and the auto-populated records from recurring invoices. You’ll also see an auditable trail for every invoice and electronic payment, allowing you to address unapproved or surprise spends.
Additionally, as a value-add service to clients, an electronic payment system offers the possibility to generate reports on everything from accounts payable aging by vendor (a summary of amounts due and liabilities for different vendors) to item price history. This spend analysis of your data can help inform any future pricing negotiations your clients have with their vendors.
Cash Back with Secure Virtual Cards
Virtual cards combine the features of a physical corporate card, the efficiencies of ACH, and the functionality of a paper check. Adding virtual cards to your electronic payment system can provide a secure, useful tool to your clients.
A virtual card exists as a 16-digit card number, as well as an associated expiration date and CVV number attached to one of your client’s business accounts. It can be used just like a physical debit or credit card online, and a new card can be generated at any time.
Your firm can create a dedicated virtual card for an individual transaction, or for a series of transactions with a certain vendor. These virtual card numbers can also be linked to certain control parameters, with spending limits like maximum dollar amount, or merchant category.
This functionality acts basically like a disposable card with security controls. If your client works with a lot of vendors online, these dedicated virtual card numbers reduce the chance of a card getting compromised due to fraud (an unhappy event that would otherwise require you to then replace that card in multiple transactions).
Using virtual cards to pay bills can also create a steady stream of income for your client’s business, or your own, through cash back. Virtual cards—vCards—can pad your bottom line with cash back on invoice spend, and utilizing a system like Plate IQ’s VendorPay can further help you monitor and streamline your expenditures.
For a card like The Plate IQ Card, you can earn real cash (not points or rewards) on any spend, from employee expenses to recurring invoices.
Learning More about Electronic Payments for Your Business
Electronic payments have become a standard part of invoice processing. Choosing a system that offers the efficiencies of digital payments, alongside the benefits of a centralized dashboard, can help you streamline your own operations and provide new value to your clients.
To simplify your vendor payments, request a demo of Plate IQ’s VendorPay today.