Customer and Vendor Payment Automation Explained

There are a number of key benefits to bringing automation into your accounting and finance team’s payment processes. Besides eliminating unnecessary human intervention and saving considerable time and effort for your accountants, automation can also help reduce data entry errors and support fraud prevention.

And this is just beginning — automating your payments can also boost internal visibility over the company’s capital and financial activity, while improving relationships with partners and potentially earning the business discounts for on-time payments.

However, there are a few different areas in which payment automation can be integrated, and it’s key that decision-makers and accounting leaders understand the differences, as well as the advantages they can achieve.

Today, we’re taking a closer look at customer and vendor payments, and how automation can impact these processes.

Customer payments: Accounts receivable automation

Payments that come into the business as a result of the sale of the company’s goods or services are accounts receivable (AR) transactions. Typically, when these AR payments arrive, they must be double-checked and matched up with the business’s internal records, ensuring that everything from the date, to the amount, payment reference and check number all align. Traditionally, this is a task that’s been handled by internal company accountants, but this is now a key process to consider for automation.

Here’s how that works: As opposed to a customer payment being received and hand-checked by staff members, a solution like SK Global’s Accounts Receivable Customer Payment Automation software takes over. This payment matching program is a highly customizable solution that enables users to establish their own matching rules and degrees of confidence, ensuring that each customer payment is matched according to the business’s AR procedures.

In this way, accounting staff no longer need to match payments manually, but can instead allow the AR automation software to run in the background and match all customer payments to the business’s records within Microsoft Dynamics. Thanks to features like adjustable levels of confidence, the software can send out a notification and elevate any customer payment issues when necessary, ensuring that nothing falls through the cracks.

For accounting administrators and controllers, this means they’re able to set up direct debit transactions with customers, speeding up and streamlining transactions while reducing the amount of required manual work for accounting staff. Automating customer payments also results in a smoother experience for the company’s clients, giving them peace of mind that all payments will be matched according to the business’s own AR procedures.

Vendor payments: Accounts payable automation

In addition to automating inbound payments that the business receives from its customers, companies can also consider implementing automation for their outbound vendor payments. Usually, the task of sending payments to the organization’s vendor partners is handled by the accounts payable (AP) department, where accounting staff communicate with the bank to ensure that all current debts are paid.

With automation in place through technology like SK Global’s Vendor Payment Automation software, however, these vendor payments can be processed while supporting direct and secure communication with the company’s bank.

Reduce the amount of human intervention required by automating vendor and customer payments.

This type of software automates the vendor payment process, and can support global payment standards including ACH in the U.S., as well as SEPA, BACS, IAT and others used abroad. In this way, even international vendor payments can be fully automated, with completely unattended file transmissions to the bank to safeguard paper checks and prevent fraud.

Additionally, with a solution like SK Global’s Vendor Payment Automation, vendors can receive a simple or customized email notification for all electronic, automated transactions coming from the business. This ensures that all parties are on the same page as far as payments, and record journals can be updated accordingly.

Similar to automation for customer payments, AP automation to support vendor payments reduces the amount of human intervention required on the part of internal accountants. This helps eliminate any chances for human error and saves considerable time for staff members, which can be reallocated toward more important, strategic work.

Finding the right solutions for AR and AP automation

Automating customer and vendor payments can be a lifesaver for internal accounting and finance staff members, effectively restructuring manual payment processing procedures for the better.

However, in order to achieve these results, businesses need solutions that can integrate directly with their current finance infrastructure, as well as software capable of supporting direct and secure communication with the bank.

SK Global’s Treasury Automation Suite can provide all these features, and more, enabling enterprises to bring much needed automation to their internal accounting procedures.

To find out more, check out our website and connect with us to schedule a demo today.