Automating accounts payable is simple. Instead of manually paying invoices, cutting checks, and then sending them to the proper entity, we do all that for you.
Since it is fully integrated with the Visual Intelligence Portfolio®, we automatically create the payment file, electronically pay your vendor, and then provide the tools to reconcile once the payments are made. All of the risks and liabilities that go with AP are no longer held by your organization.
Imagine what your AP office could get accomplished if it could hand off all the headache and frustration that comes with paying vendors?
Automating the accounts payable process is a relatively new concept and with any newer technology, it’s natural for myths to begin circulating.
Let’s break down a few common myths we hear about automating the accounts payable process.
MYTH 1: OUR BANK ALREADY ALLOWS ELECTRONIC PAYMENTS
There are a few layers to this myth. Your bank can deliver an electronic payment to your vendor, but you still have to do all the work. Providing the intricate details they require is not easy and very time-consuming. (Specific instructions in a specific format that include who to pay, how to pay them, and where the money should be sent). Your bank will not:
- Integrate with your accounting software. You will have to manually create and send the file and do it again to import the successful payment info back into your system. (This eliminates any time savings you had and opens you up for data entry errors.)
- Separate invoices by payment method. (You’ll still have to do this manually.) If something is wrong, you’ll be stuck in the middle playing detective with your bank and the vendor trying to figure out where the error was and how to fix it.
- Assume liability for the payment to mitigate fraud risk.
Overall, banks are not a partner for increasing the efficiency of your accounts payable process or the effectiveness of your office.
MYTH 2: POSITIVE PAY SERVICE TO PROTECT US FROM FRAUD
Using a positive pay service with your bank only matches the account number, check number, and dollar amount of the check.
There is still a protection gap that allows for bad actors to compromise the check, and the bank will not accept liability for sending a check to a bad vendor. For example, there has been an increase recently in ACH fraud, with fraudsters calling an AP department pretending to be a vendor that’s updating their banking information. What if someone in your office were to update the information and begin sending payments to a fraudster?
Payment automation mitigates these risks because the tool assumes liability for the payment.
MYTH 3: AUTOMATING AP WILL GIVE US LESS CONTROL
Automating your AP process will actually give you MORE control and insight into your approval process.
The AP workflow solutions available will allow you to set sophisticated approval rules and conditions. For example, you can set up dollar value conditions, and you can temporarily designate approval roles to individuals if you’re out of the office.
Whatever the condition may be, your insight and approvals will be tracked, instantaneous, and keep a history to make audit season much easier. Automating or digitizing this process won’t relinquish your control, but it will take some work off your plate.
MYTH 4: AUTOMATING ACCOUNTS PAYABLE IS EXPENSIVE
Adding something new to the organization doesn’t mean it adds costs; there are actually plenty of opportunities for it to reduce the overall costs of the AP department. For example, the more vendors that were paid via card, the higher the possibility for rebates, opening up another potential revenue stream for the city.
There are also cost savings with outsourcing the process such as reduced postage, lower ink costs, virtually no envelope costs, time saved from having to process payments manually, and other miscellaneous savings.
Automating the accounts payable process will give your organization the benefits of a more efficient and secure AP office. Having a fully integrated payment solution, improved fraud and liability protection, and greater visibility, control, and history on your payment approval process are changing the way AP offices are operating for the better. To learn more about how AP automation can help your office, visit our website or give us a call at 800.686.9578.