Manual processing of AP Discounts on missed payments
The cost of maintaining the status quo has just increased.
This is because new research shows that companies that use an outdated manual non-payroll expense system are not only less efficient, but also forego prepayment discounts that are typically captured by companies with automated AP technology.
By helping businesses quickly pay their suppliers and vendors, these systems enable them to take advantage of the discounts available to them when they pay the invoices they receive promptly, according to “Improve Financial Performance: Take Advantage of Early Payment Discounts», a PYMNTS and Air-base collaboration based on a survey of 225 software-as-a-service (SaaS) business leaders.
In fact, while 27% of companies that use an expense management system say they take advantage of vendor prepayment discounts “all the time”, only 15% of companies that don’t have such a system say same thing.
In addition, 8% of companies without a system say they never take advantage of these discounts, while only 4% of those with a system say the same.
Rely on time-consuming manual processes
What prevents companies from taking advantage of these discounts? Errors and delays resulting from the way companies manage their non-wage expenses, according to the report.
Companies that fail to obtain the discounts typically offered by suppliers and vendors often rely on manual processes that are time-consuming, inefficient, and error-prone.
In fact, 20% of executives said data entry errors were their biggest challenge.
“It all starts with mistakes,” Airbase VP of Business Development Dan DeVal said PYMNTS in an interview published Nov. 8. [creates] a ton of wasted time with reconciliation.
For this and other reasons, DeVall said, getting the accounts payable (AP) the process under control has become a priority mission for many companies.
Pay suppliers in a timely manner
A key benefit of using a non-payroll expense management system is automation, which reduces data errors and allows companies to pay vendors faster, according to the report.
An automated expense management system can streamline processes related to companies’ payments to their suppliers and vendors, reduce data processing errors, and help companies’ PA teams pay suppliers before the invoice is due.
Embracing automation that delivers compliant approval workflows and real-time reporting, DeVall told PYMNTS, “You can rely on integrations to be able to capture, store and ultimately share data across the company. You can also smooth out a compliant process. You can also make substantial savings on cash benefits. »
This, in turn, allows accounting departments to optimize card spending and increase things like cash back for the business, DeVall said.
As those with an automated expense management system have discovered, taking advantage of rebate opportunities helps companies cut costs, improve bottom line, and drive growth.
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