How do you turn payments pain points into payments possibilities?
It’s a simple formula: Add automation.
“More and more organizations are recognizing the need to update and modernize what has historically been a manual, paper-based process — but one that’s also very mission critical to the business function,” Kat Battle, product manager for Complete AP at Bank of America, told PYMNTS.
She was speaking about accounts payable (AP) automation.
In a macro environment where efficiency and accuracy around cash flows reign supreme, businesses are increasingly turning to innovative solutions to streamline their financial and payments operations.
“Traditional AP programs take a lot of people, a lot of processes and a lot of labor,” Battle said. “All of that carries a significant cost for businesses. Companies very often have those historical, manual, paper-based processes and relatively small teams to manage them. They would love to digitize those invoices. They would love to turn those costly check payments into virtual cards or ACHs, but they might not have the staff or the capacity to do that. And that’s where they turn to AP automation to cut those costs across the board.”
But not every automation product is a winner.
As businesses recognize the need to modernize traditionally manual, paper-based processes, Battle emphasized the importance of selecting an AP provider with a solid foundation in people, process and technology.
Innovation and enterprise digital transformation initiatives operate across a continuum.
“Many, many companies are managing their AP department on paper invoices and paper checks,” Battle said. “And that can look like a team of people opening envelopes, pulling those invoices out, walking them around their office for signature from someone to approve them, and then cutting a paper check to make those payments.”
Hardly the image one sees when picturing a 21st-century business, but Battle added that she encountered a client the other day who was “hand signing 7,000 checks per month and mailing them out.”
Inadvertently, that business was opening the doors to fraud. Beyond the cost savings associated with AP modernization, automating away legacy bottlenecks also helps better secure business payments, explained Battle.
“AP automation solutions can automate 75% of the manual steps required for paper-based methods, leaving only the control pieces of the process behind like approving invoices, approving payments,” she said.
Increasingly, taking the step to automate the AP function can bring unexpected benefits that help transform businesses beyond positively impacting their bottom line.
“It can turn that historical cost center [the AP function] into a value generator,” Battle said.
Businesses can leverage AP automation to engage with suppliers more effectively. By plugging into a supplier network model, solutions like Bank of America’s Complete AP product offer clients access to a network of suppliers, enabling day-one automation, she explained.
This not only streamlines payment processes but also manages sensitive supplier data, alleviating clients from the burden of handling this information.
In one example, Battle cited a national marina company that Bank of America worked with that dealt with thousands of paper invoices and checks every month and needed more control over its dispersed operation.
“There was so much paper floating around as part of their accounts payable process, and they really needed a centralized way to get visibility into all of that and control all of that, which [Complete AP was able to provide],” she explained.
In the lower middle market, where resources may be limited, outsourcing through solutions like Complete AP becomes a key strategy. Digitizing invoices and transitioning from checks to virtual cards or ACH payments can be transformative, especially for smaller teams with historical manual processes, Battle noted.
“When you introduce AP automation, you can often repurpose employees to more value-added tasks or more growth-driven tasks,” she said.
Beyond that, the digital experiences provided by solutions like Complete AP resonate with the expectations of Generation Z and millennials, making businesses more appealing employers.
After all, what member of a younger generational cohort wants, or even expects, to sit around opening, filling and sending envelopes?
As for what the Bank of America product leader sees in the future?
“We are working hard to turn checks into digital payments, but tighter integration with ERP [enterprise resource planning] systems is also an important area, as those ERP systems are the lifeblood of businesses and their cash management practices,” Battle said. “It’s extremely important to keep those systems of record in sync.”
“There’s another innovation that’s launching next year that will help our clients automate even more and drive greater benefits,” she added.