Efficiency and Security in Invoice Payment :The Advantage of Automation

What is An Invoice Payment

An invoice is a payment request sent by a supplier for the goods or services they have provided. It includes details on what has been supplied, the total amount owed, payment methods, and the due date. Upon receipt of an invoice by an organization's Accounts Payable (AP) department, the end-to-end AP process begins. The invoice must be entered into the AP system, where it undergoes approval and authorization, before payment can be made. This process is referred to as the invoice-to-pay workflow.

The Best Way to Pay an Invoice

Check

The conventional way of printing and sending invoices to the recipient can lead to delays. Despite the increasing popularity of electronic payments, 33% of companies still make over 50% of their payments through checks, causing extra costs for both the Accounts Payable departments and their suppliers' Accounts Receivable teams.

Virtual Cards

Non-physical cards operate similarly to credit card payments but use a unique, one-time 16-digit code to authorize only a specific payment amount, making them highly secure.

ACH

The term ACH refers to Automated Clearing House transactions, which are electronic network transactions performed by financial institutions. This payment method facilitates direct transfer of funds between banks.

OnlineCheckWriter offers an Accounts Payable solution to help organizations determine the most suitable payment method for each transaction. Our team also collaborates with vendors to identify the best payment option for them, and takes care of the onboarding process. Our solution supports all payment types, including checks, ACH, virtual cards, and foreign exchange payments. Additionally, the virtual card payment option offered by our solution even provides an opportunity to generate revenue through cashback rewards.

What are the Pros of Automated Invoice Payments?

Cost savings:

Automated invoicing also cuts down the cost of invoice processing. Through automation, the cost to process a single invoice comes down to as low as USD 1. As the costs reduce exponentially, the business can cut its operating costs to improve its profitability.Time savings:

Time savings

Historically, Accounts Payable teams dedicate a significant amount of time and resources to tasks such as capturing, coding, and overseeing invoice approvals. With automation software, much of this repetitive work is taken care of, freeing up your employees to focus on higher-value tasks.

Automation can simplify manual processes such as capturing, coding, and approving invoices and matching purchase orders. In the current hybrid work landscape, implementing a system that doesn't rely on paper-based processes can also ensure the long-term viability of your business.

Improved accuracy

The use of automation minimizes the possibility of human error in tasks such as typing, calculating amounts, and ensuring timely approval of invoices. Improved accuracy leads to better vendor relationships and reduces the time required for managing invoices.

Improved security

Reduced risk of fraud and improved security is a benefit of automation. By limiting human intervention and incorporating security measures such as two-factor authentication, segregation of duties, and automation enhances the protection of the invoice payment process.

key Functions of an Invoices

Record Keeping

A crucial advantage of invoicing is the establishment of a legal record of the transaction. This enables tracking of the date of sale, buyer, and seller information.

Payment Monitoring

Invoicing plays a critical role in accounting and helps both the seller and buyer to keep track of payments made and outstanding debts.

Legal Security

An accurate invoice serves as legal evidence of the agreement between buyer and seller regarding the agreed-upon price. It safeguards the seller against potential fraudulent legal claims.

Simplified Tax Filing

The proper recording and storage of all sales invoices assists the company in reporting its income and ensuring accurate tax payments.

Business Intelligence

Examining invoices provides businesses with insights into their customers' purchasing behaviors, allowing them to identify trends, popular items, peak buying periods, and more. This information can be utilized to formulate successful marketing plans.