The Ultimate Guide to Payment Automation: What It Is and How It Benefits Your Business
4 min
Tags
In today’s fast-paced business world, managing accounts payable efficiently is more important than ever. According to the Accounts Payable Automation Trends 2024 report published by the Institute of Financial Operations & Leadership (IFOL), 52% of AP teams still spend over 10 hours weekly processing invoices, and 60% manually enter invoices into their accounting software. Additionally, Allied Market Research estimates that the global accounts payable automation market, valued at $5.4 billion in 2023, is projected to reach $17.1 billion by 2032.
Traditional methods, such as cutting and mailing checks, drain time, money, and resources while leaving businesses vulnerable to errors and fraud. The European Banking Authority’s 2024 Payment Fraud Report highlights that payment fraud remains a significant concern, with Strong Customer Authentication (SCA) playing a crucial role in reducing fraud rates. Payment automation offers a modern, secure solution to these challenges by streamlining AP processes with digital workflows. The market’s projected compound annual growth rate (CAGR) of 13.9% from 2024 to 2032 demonstrates the increasing adoption of these solutions across industries.
In this guide, we’ll explore the key features of payment automation, its benefits, and why it’s becoming essential for businesses of all sizes.
What Is Payment Automation?
Payment automation refers to the use of technology to streamline the accounts payable process. It replaces manual tasks—like check writing, mailing, and reconciliation—with secure electronic payment methods such as ACH, virtual cards, and wire transfers. According to recent studies, organizations can eliminate up to 110 hours per week of payment workload through automation.
Payment automation platforms often integrate with popular accounting systems, making it easy to transition from traditional methods to modern solutions without disrupting existing workflows.
Key Benefits of Payment Automation
- Save Time
Manual AP tasks like cutting checks and processing invoices take hours to complete. Automation eliminates these repetitive tasks, freeing your team to focus on strategic priorities. - Reduce Costs
Switching from paper checks to digital payments lowers transaction costs and eliminates expenses related to printing, mailing, and processing checks. - Prevent Fraud
Advanced security features, including single-use virtual cards, reduce exposure to fraud and unauthorized transactions. Digital payments offer a secure alternative to traditional methods. - Generate Revenue
Many payment automation platforms offer rebates for virtual card usage, turning your payment process into a potential revenue stream. - Improve Accuracy
Automation ensures payments are processed on time and applied accurately, reducing costly errors and improving reconciliation.
How Does Payment Automation Work?
Here’s a step-by-step breakdown of how payment automation transforms your accounts payable:
- Transition to Digital Payments: Payments shift from checks to secure methods like ACH, virtual cards, and wires.
- Automated Workflows: Tasks like invoice approvals and payment scheduling are handled automatically.
- Intelligent Routing: Transactions are routed through banks offering the best financial incentives, such as lower fees or higher rebates.
- Real-Time Tracking: Detailed dashboards provide visibility into payment statuses, vendor adoption rates, and revenue generation.
Who Can Benefit from Payment Automation?
Payment automation is ideal for businesses looking to:
- Simplify accounts payable processes.
- Reduce operational costs and improve efficiency.
- Minimize fraud risks.
- Increase revenue through payment incentives.
- Transition vendors to secure digital payments.
Studies show that 41% of companies expect to achieve full automation within 1-3 years, with the banking and financial services sector leading adoption at 36% market share.
Conclusion
Payment automation isn’t just a convenience; it’s a strategic advantage. With 90% of large enterprises globally implementing some form of automation and businesses saving up to 80% on processing costs, the benefits are clear. By saving time, cutting costs, and improving security, it helps businesses stay competitive in an increasingly digital world.
Ready to transform your accounts payable? Contact us today to schedule a free analysis and discover how payment automation can benefit your business.
“The new AP workflow system empowers employees to work smarter and provides a more efficient experience for vendors.”
Jordan Anderson, Strategic Finance Accounting Analyst at Douglas County
Contact Us
Fill out the form below to get in touch with us. We’ll get back to you right away.
Related Articles
6 Invoice Processing Questions: How Many Can You Answer Yes?
We'd like to ask you a few questions about how your organization processes invoices: Can you approve any invoice in 45 minutes...