Over one in five Finance decision-makers (23%) rated their company’s payment performance as average to awful at the beginning of 2020. The Covid-19 pandemic has forced digital transformation on lots of businesses, and the finance department should not be any different.
Small to medium-sized businesses often fall on hard times because they are suffering from poor cash flow due to late payments being received from partners and customers.
The remote working revolution, brought about by Covid-19, has been easier for some businesses than others. But, if not having the right tools and processes in place makes you the late payment villain for your suppliers and partners, then the fix is easy: automate your Accounts Payable function.
Automating the Accounts Payable process allows businesses to approve and process invoices easily and efficiently from anywhere, resulting in faster payments to your suppliers. Something which I’m sure many businesses would appreciate right now. It has been found that over 50,000 small businesses go bust every year due to late payments and its effect on cash flow. You don’t want to be the customer that causes your favourite supplier to go under.
Automated solutions can automatically capture relevant data from invoices, route it to staff electronically for coding and approval as well as posting it automatically into the ERP system ready for payment. This helps to speed up invoice processing, meaning you can pay your suppliers much quicker and keep them happier. This is all done whilst ensuring only the relevant people approve the invoices associated to their area of responsibility.
Having the digital systems and processes in place to operate as normal may be one of the contributing reasons for this significantly lower number. But one thing is certain, having automated Accounts Payable systems in place has allowed people and processes to work remotely with minimal negative impact.
A digital system like the one explained above ensures invoice approval does not become a bottleneck by allowing invoices to be processed from anywhere. This means invoices are paid on time, cash flow is healthy and supplier relationships are retained. These are all positives in a time where business leaders are desperately looking for good news.