Although accounting software has revolutionized accounting functions across businesses large and small, manual processes still play a big role in a huge number of accounts payable operations. For some companies, perhaps the thought of automating their systems with digital payments and virtual cards seems daunting or unnecessary.
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The reality, however, is that companies can quickly and easily turn a cost center into a profit center, ultimately creating a new revenue stream. While the time is always right when it comes to automating accounts payable systems, there truly is no time like the present: The COVID-19 pandemic impacted life and business as we knew it, and accounts payable systems were no exception. Suppliers who, for whatever reason, weren’t on board with receiving payments electronically were all but forced to do so. As we move toward a post-COVID-19 world – on January 30, President Biden informed Congress that he plans to end the twin national emergencies for addressing COVID-19 on May 11 – receiving digital payments is the new normal for many suppliers.
While payments automation streamlines processes, saves money, and improves working capital, payments optimization on the WEX digital payments platform can bring companies so much more, including revenue generation, efficiency, and security.
Payments Optimization: Get paid to pay your suppliers
Before we dive into how optimizing payments can create new revenue streams, it’s important to note that according to CFODive, switching from manually intensive operations such as check writing to an automated accounts payable system can save you around $15 per invoice in overhead costs. At that rate, savings can add up quickly. Combined with monthly rebates – in essence, cash back from WEX on all payments to enrolled suppliers – a new revenue stream is created.
Businesses can take advantage of WEX’s broad issuing capabilities, technology investments, and focus on customer service in addition to enjoying competitive rebates. WEX is in a unique position with the ability to execute on these offerings in-house, increasing the company's flexibility. This includes allowing WEX to offer VIP rates that other companies typically can’t offer. Additionally, WEX pays the rebates monthly so that its customers receive their rebates quickly.
Efficiency: Accounts payable departments can make better use of time by using digital payments
Automated account payable solutions can dramatically reduce the time and resources spent managing invoices and payments. Plus, access to real-time data analytics and dashboards provides a better understanding of performance and possible ways to improve. By using a digital payments platform such as WEX, payments and reconciliation are streamlined, supplier relationships can be improved, better payment terms can be negotiated, and planning accuracy is increased.
Additionally, when your team is freed from the tedious tasks associated with a manual accounts payable system, they can focus on more meaningful work.
“We eliminate tasks, not positions,” says Lauerman. “Our platform isn’t designed to eliminate positions. It’s designed to enable AP teams to become more efficient, focused, and productive.”
Security: Reduce the risk of fraud by adopting digital payments
The use of a virtual card – a single-use, randomly generated 16-digit credit card number – greatly reduces the risk of accounts payable fraud. Virtual cards simplify and increase the security of every transaction. WEX processes billions of dollars annually and has the proven and trusted capabilities to provide customers virtual payment options that save them time and money.
With payments optimization via a virtual card platform from WEX, you can reduce fraud, overpayment, and unauthorized use. Plus you can:
- Earn incremental revenue with every virtual payment
- Add customizable controls to help further reduce fraudulent use
- Negotiate supplier discounts in exchange for real-time payments
- Enable compliance with configurable business rules and workflows
By combining the right products and services into one powerful payment engine, WEX helps you automate, simplify, and secure payments. Learn more.
CFO Dive: Manual AP systems cost companies up to $20 per for manual and $5 per for automated per invoice to process, 2019