Airbase’s recent ebook The Definitive Guide to Spend Management explains the role of design thinking in creating an effective spend management platform. Paying bills is an excellent example of how design thinking’s user-centric approach reimagines existing processes and transforms the entire experience. For proof of how even seemingly small changes can impact the bill payment function, compare older bill payment systems to the capabilities found in a modern spend management platform. Legacy bill payment systems may do an adequate job of getting payments out the (virtual) door. But modern spend management platforms incorporate little details that make a big difference in automated bill payments, resulting in a better user experience, stronger controls, and a more accurate view of financials. Take a look at some of the differences between a spend management system and legacy bill payment tools.
The difference: Consolidated payments on a single platform.
The benefit: No more piecing together different systems, and better visibility.
The benefits of using a single platform, whether you pay by check, debit / credit card, or ACH, extend beyond the convenience of not having to toggle between systems. The ability to see all AP activity in one place reduces the time spent reconciling different finance systems, and ensures all financial transactions are up to date, so budget owners always know if budgetary targets are on track. Plus, when it’s possible to set rules that automatically code, tag and sync transactions to the General Ledger, the time-to-close is much shorter, and it’s often even possible to move to a continuous close. All required documentation is collected in a single source of truth, making all documents easily retrievable for month-end close or for an audit.
Consolidating systems can even provide opportunities to monetize bill payments. Shifting payments from expensive types (checks can cost between $3 and $13, and ACH often has fees) to virtual cards that pay cash back generates revenue for AP. It’s an easy switch when a virtual credit card or prepaid card program is integrated with a bill payment function.
Finally, a consolidated system shows vendor credits that are available for use to make a payment so that they are not lost or forgotten.
Learn more about how spend management can help you streamline all aspects of AP.
Download The Definitive Guide to Spend Management.
The change: A well-designed Invoice Inbox.
The benefit: No more detective work.
Receiving an invoice can lead to a lot of sleuthing if it arrives without enough context. Any finance professional who’s ever asked, “Why did we buy this?” or “Where is the purchase order?” will appreciate a platform that provides the answers up front. A smart spend management system matches all of the elements for creating a bill, including the invoice, purchase order, and receipt, and can automatically attach any relevant email chains and other documentation for background information. Optical character recognition (OCR) can even separate the invoice from other documents and file it correctly in the system. Plus, a smart system checks to make sure a vendor has submitted a W-9 before issuing payment, and helps with Form 1099 submission when it’s time.
The change: More comprehensive automated accounting.
The benefit: No more wasted time or errors.
Increased efficiency in automated bill payment is one area where little details add up. For example, instead of manually entering details for vendor, amount, due date, and invoice number when paying a bill, OCR technology can autofill that information, saving time and reducing the risk of errors. Automation can also create, track, and execute an amortization schedule for subscription or prepaid services. It can also ensure timely bill payments, by giving users the option to schedule a payment, pay right away, or pay by due date, and then working backwards from that date to determine when to process a payment, taking details like postal holidays into account if a check is being mailed.
An easy sync to the GL ensures accurate, up-to-date financial information is readily available without the need to generate ad hoc reports, or work with incomplete information when paying bills, budgeting, or completing forecasting activities.
We can’t guarantee that these details will make anyone fall in love with paying bills. But we do know that an improved user experience and increased automation will improve the overall bill payment process. Contact us to find out how you can benefit.