How Payment Automation Can Positively Transform Your Logistics Company
Cutting down on your business’ costly, high-effort administrative tasks is always a great idea. Especially when doing so also increases accuracy and limits human errors.
One of the many operational areas where automation can play a positive role in your company is in its accounts payable (AP) departments.
Despite how incredibly admin-heavy payment processes typically are, AP departments still seem stuck in an outdated paradigm. We get it, though. It feels risky to digitize long-established manual processes. It rocks a boat that feels stable, albeit moving really slowly. But digitization and automation, as scary as it sounds, is an absolute necessity if you want to survive in the world of logistics.
As we referenced in a previous article on this topic, the AFP reported that 42% of all payments that businesses make still happen by printed checks. This represents a shocking amount of wasted effort. Especially if you consider the many alternatives available to AP departments nowadays.
At the same time, the payment automation industry has matured significantly. As a result, the available solutions in this space have grown in number, capabilities, and reputation. The genuinely exceptional products in this niche are enabled by innovative technology and supported by intuitive workflows. They utilize reliable, secure financial processes.
Here are some tangible rewards your logistics company will enjoy once you’ve modernized it with one of these automation solutions.
It Speeds up Invoice Approval
According to Stampli, 57% of companies who switched to AP automation did so because it reduces invoice approval time.
In the logistics industry, where businesses rely on the services of many external service providers, unpaid invoices can quickly start piling up. This can cause an admin backlog that’s not only an operational headache to fix but can also have more serious consequences. In extreme cases, unpaid invoices can disrupt supply chains and damage the reputations of both logistics companies and their customers.
Automatic payment solutions typically enable effective workflows that simplify approvals and lower the risk of unpaid invoices falling through the cracks.
These tools act as a dedicated, real-time communication channel between AP staff and other resources within the company. They also offer digital approval mechanisms that almost entirely remove the need for physical interaction and document handovers.
It Improves Morale and Accuracy
Data entry and invoice management both feature very prominently in Business Insider’s list of organizational morale-killers.
Unfortunately, the nature of an AP department’s work dictates that these two tasks take up quite a bit of the average clerk’s time. Repetition leads to boredom, and boredom can lead to a lack of focus and mistakes.
This is human nature. Management or incentivization are not sustainable solutions to this inescapable reality of the manual workplace.
What’s the answer, then? (No prizes for guessing.)
Tools that enable payment automation often include features like automatic data extraction, AI-powered data matching, and character recognition, and automated ledger capturing.
All of these are excellent alternatives to an analog approach that’s compromised by tedium and an inevitable lack of focus.
It Prevents Payments Being Overlooked
People make mistakes. They forget to do stuff, even things that are a core function of their job. No one is infallible.
Even when all the necessary details are taken care of, the human being responsible for clicking on the “pay” button or for taking a check to the bank can still simply forget to do so.
The fallout from this little oversight can be significant. Late payments hurt reputations. They can severely disrupt supply chains. And missing out on early-payment discounts can damage cash flows, especially when dealing with large invoice amounts as logistics companies often do.
By design, automated payment systems avoid this scenario entirely. Each tool offers a slew of features that help AP teams make sure payments are made on time.
It Creates an Additional Source of Usable Data
One of the biggest rewards of being a data-driven company is that strategic decisions can be based on cold, hard facts rather than hunches.
In a professional environment that’s as cutthroat as logistics, we cannot afford to rely on hunches. No matter how much instinct or insight a manager may have, nothing is going to beat meaningful data when it comes to supporting important decisions.
In all likelihood, your logistics company is already using an operations tool like CarLo, Descartes, and SBT to create meaningful information. You may even be using your CRM, accounting, or HR tools to contribute to the data pool that drives strategy.
This is a great position to be in. The usefulness of data improves dramatically as one combines information from various sources within the organization.
If your AP department is still running on pens, ink, and visits to a bank, it’s creating no digital data. And there’s no way for it to contribute to the data stacks that inform important decisions within the company.
A solid payment automation tool will solve this problem, creating cloud-hosted data that your business intelligence software will easily be able to reference.
In Closing: the Importance of Finding the Right Fit
Not all payment automation solutions are created equal. They differ in terms of price, workflow enablement, technical features, and sensitivity to industry regulations.
That’s why it’s vital for you to do a thorough investigation into the products in this space and choose one that best suits your logistics company.
Take your time and think through what sets one solution apart from another. Be sure to invest in one that’s not only ideal for the nuances of your industry but also your company’s established workflows and culture.
This is a big decision. The stakes are high. Don’t hesitate to involve your entire AP team to get their input. Each of them will be able to provide unique insights into their daily tasks and advise on how a particular product could help them or hinder them.
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