The business impact of automated payment management

“Money often costs too much": why payment management is still tricky in 2022

The reality is, handling payments can be a meticulous and time-consuming task, and like others, can be something that business owners prefer to outsource to accountants or bookkeepers. Traditionally, invoice and payment management was a multi-step process involving two pain points:

• Manual data entry,
• Paying close attention to the amount and bank account entered.

As a result, this has become an undesirable service offering for accountants and bookkeepers, who may shy away from the additional responsibility and time commitment. 

PAYMENT MANAGEMENT: The 4 main issues of manual data entry

Manual data entry has four main issues that surround it.

1. Firstly, it is subject to human error, creating potential for businesses to incur serious financial or reputational risks as a result of a misfiled, unpaid or duplicate payment or invoice.
2. Further, manual processes can be delayed for all sorts of reasons, and such delays can cause strain on relationships with suppliers, creating instability.
3. Because of the time-consuming and repetitive nature of manual payments, it is a task that often gets pushed back on professionals’ agendas, creating a cash flow bottleneck, where payments are close to being due, but have yet to be filed due to other tasks being prioritised.
4. Lastly, the time spent on manual invoice management, whether undertaken by business owners themselves or outsourced to accountants or bookkeepers, is time that could be spent on other tasks.

The impact of financial mismanagement on businesses

Financial mismanagement, caused by manually administered payments, can have dire effects on businesses. 48% of small and medium-sized enterprises have reported that overdue invoices have a critical impact on their business performance. 28% have said that they have been forced to delay supplier payments in the past, with 25% of suppliers affirming plans to cease to provide supplies to late-paying customers - this tarnishes a relationship which is necessary for successful business growth. On a larger scale, there has been a 25% increase in the average amount owed in late payments in the last twelve months. Such a systemic issue requires a groundbreaking solution - this lies in automation.

What is an automated payment system?

Automated payment management is a software solution for making payments, paying invoices and invoicing customers. It can also be used to automate accounts payable processes, accounting and finance functions and human resource operations.

What are the features of an automatic payment service?

The core function of an automated payment system is to accept and initiate payment instructions from the customer, validate them against its own internal business rules, and then carry out the transaction by sending appropriate messages to the bank. The system may also be able to process batch payments and provide reconciliation reports.

Why is it beneficial to automate your payments?

The benefits of an automated payment system include:

• Eliminating the need to manually process data
• Reducing errors associated with manual data entry
• Providing real-time access to data for decision making purposes
• Minimizing the risk of fraud or theft, since all transactions are recorded electronically

By adopting fully-integrated and automated B2B invoice management and payment solutions, business owners and financial professionals can win back up to ten hours per week which would otherwise be dedicated solely to filing invoices and ordering payments - think of all that could be done with an extra half day each week.

Embrace payment automation with Libeo

Libeo affords its users greater financial stability and security, letting them know how much money is coming in and out, and when, enabling them to dedicate time and resources to plan ahead and continue driving their businesses forward.

The platform allows for end-to-end management of the purchasing cycle:

With Libeo, Scans and sorts all of your invoices. One single platform to manage and pay all your supplier invoices.

Libeo is a fully integrated and automated business-to-business payments platform, bridging the gap between invoices, payments, reconciliation and accounting.

Simple and secure payments without chasing bank account details or logging into your online banking.

Automation has also taken the accounting world by storm, giving accountants and bookkeepers greater visibility of companies’ finances, allowing them to give more informed advice to clients and actively participate in discussions, enhancing the business development process. Further to this, automation removes silos between different areas of the business, removing needless approval processes and ensuring smooth sailing. 

In a world where 80% of businesses go bankrupt in their first year of operations, and where 25% of those bankruptcies are a result of late payments, all members of a business have much to gain from embracing payment automation.