How Automated Validation Can Help Achieve Business Goals

The payments process is the beginning of so many important parts of good business—customer experience, supply chain efficiency, accurate financial reporting and data security. But one of the major pain points to leveraging these benefits is validation and reconciliation. Automation can help make the payment process more efficient—and ultimately help achieve those business goals more easily.

Automated validation makes payables and receivables more efficient

Paper slows down processes and increases the potential for human error. Handling paper invoices and matching remittance data can tie up accounts payable (AP) staff for hours, and the humble check is still a burden to efficiency in many AP departments. Meanwhile, real-time cash positions also end up lagging.

Advanced electronic payables solutions address AP concerns by making it possible to shorten the reconciliation process and reduce the risk of fraud. The process of matching the purchase order price to the invoice receipt is also automated, creating accounts receivables (AR) proficiency.

Ultimately, with these efficiencies, treasury can evaluate payments terms and determine the best mix of payment types to meet organizational goals and benefit the entire business.

Automated validation enhances supply chain relationships

In addition to driving efficiencies in their own AP and AR processes, organizations can use these automated payments solutions to simplify the supplier payment process, creating tighter integration of buyer and supplier financial systems that benefit everyone.

A good example of this type of tool is Expert AP powered by AvidXchange, which has a supplier enablement feature that brings the supplier invoicing process online. The increased information flows can be used to support discount negotiations with suppliers. On the other side of the relationship, suppliers can improve their reconciliation processes thanks to the enhanced data provided with payments.

Tools such as this can put excess cash reserves to work, allowing the business to shorten days payable outstanding (DPO) and obtain discounts that improve profit. Equally, a commercial card payment solution can be used as part of a cash conversion strategy. This option puts a company’s debt capacity to work, extending DPO and creating operational efficiencies.

Automated validation ladders up to more accurate financial reporting

For reporting output to be meaningful, any input errors need to be reduced as much as possible. With automated validation of your payments, you can remove manual inputting from the equation, and payment information can immediately populate the relevant area of the reporting system.

Going one step further, leveraging the right technology in the reporting process and implementing it into the reporting workflow can allow the organization to 'slice and dice' the information as required, and bring data analytics to bear to provide the company with a comprehensive picture on where it is succeeding and where it could be doing better.

Automated validation helps increase data security

Despite the growth of electronic payments methods, the use of paper checks continues to create security headaches for businesses, as they are less secure. It puts pressure on corporations to be vigilant when controlling check stock and balancing account statements. At the same time, if the organization falls behind in reconciling payments, it is harder to detect fraud in a timely manner. Automated protection tools and processes allow treasury to monitor and detect unusual or unauthorized activities, mitigating the risk of fraud.

Change for the better with automated solutions

Improving payment processing directly improves working capital, which supports the whole business in efficiently reaching its goals. The right bank partner can help provide the solutions to solve this equation, converting paper-based items into electronic payments and improving efficiencies across the business and supplier network.

The views expressed by the author are not necessarily those of Fifth Third Bank and are solely the opinions of the author. This article is for informational purposes only. It does not constitute the rendering of legal, accounting, or other professional services by Fifth Third Bank, National Association or any of their subsidiaries or affiliates, and are provided without any warranty whatsoever. Deposit and credit products provided by Fifth Third Bank.