Making Integrated Payables Work: How to Help Your Money Do More

November 7, 2023 |
Article | 5 min
| Business Insights

Making Integrated Payables Work: How to Help Your Money Do More

If you’re still running manual payment processes, you may be leaving money on the table. Learn how treasury processes like integrated payables have a direct impact on both your cash flow and vendor relationships.

Treasury processes like integrated payables can have a direct impact on both your cash flow and vendor relationships. And yet, many accounts payable (AP) departments rely on manual, unintegrated systems to manage multiple workflows with different files. This lack of automation can cause errors, late payments and other inefficiencies.

Improvements to your treasury management can generate significant returns. For instance, reducing redundancies in your payables process increases your access to working capital. To achieve these improvements, it’s helpful to first understand how integrated payable systems work so you can make the most of them.

What Are Integrated Payables?

Integrated payables is a method of processing all payments through a single system. When you upgrade to a unified system, you can manage all your payable functions from one central location.

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When tasks such as invoicing, vendor management and payment processing share the same workflow system, it becomes much easier to access and track transactions. Plus, integrated payables often allow you to better take advantage of perks like early payment discounts.

An integrated payables system enables you to reduce administrative workload and error margins by automating and uniting workloads that previously required extensive manual input.

For example, your AP department can merge payments together and send them in a single file to a consolidated payables provider. Then, the provider distributes the payments to vendors in accordance with your file.

What Are the Benefits of Integrated Payables?

Investing in integrated payables has the potential to yield significant returns, largely due to the overwhelming benefits a modern system can bring. In addition, unified systems can solve many common issues you may face.

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The key attributes integration brings to AP processing include:

  • Fraud prevention: Advanced digital systems come with built-in fraud prevention measures. This gives you total control over file processing, automated review of issued checks, internal flagging of suspicious activity, various authorization methods and protection against ACH debit fraud
  • More cash flow: Slow transactions may tie up capital, but quick processing releases funds faster. Plus, the ability to preset automated payments makes transaction timing more predictable.
  • Increased efficiency: Automated processing can significantly reduce your workload. It can free up your AP department to focus more on managing company finances and vendor relationships.
  • Remote processing: Your AP department can oversee processing from anywhere.
  • Fewer errors: Manual processing may leave room for human error, while automation operates with a high degree of accuracy, as the system flags discrepancies for your review.
  • Better vendor relationships: More efficient and precise workflows can help reduce late payments and even allow you to negotiate early payment discounts.

What Problems Do Integrated Payables Solve?

Integration can be used to solve issues with outdated legacy systems. For instance, if your company needs greater access to working capital, this could be due to inefficiencies caused by old treasury management systems. Upgrading your payment solutions could free up your funds.

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Or, if missing invoices are causing tension in your business relationships, integrated systems’ reliable tracking methods and automated payment processes can provide a solution.

Modernized payment systems are designed to solve the traditional issues you might be facing with cash flow and slow processing times. But these systems go even further to provide additional perks. Notable features include the ability to negotiate early payment discounts and increased transaction transparency, which can generate key insights to guide financial decision-making.

What Businesses May Consider Implementing Integrated Payables?

Integrated payables can be incredibly beneficial if your business uses multiple payment types or partners with several different vendors. It’s also a good strategy to consider for companies trying to modernize their paper-based systems.

For example, if your business is in manufacturing, retail or distribution, your payables probably go out to many different vendors and suppliers. For you, manually managing the incoming invoices, outgoing payments, and transactional data is likely exceedingly complex and time-consuming.

In addition, errors like lost invoices and late payments resulting from an entangled system could damage your company’s relationship with suppliers. In this case, upgrading to an integrated system would offer exceptional returns, as increases in efficiency are sorely needed.

Basically, any business that could benefit from more cash flow, reduced administrative processing labor or added efficiency could potentially benefit from implementing integrated payables.

How Does Integrated Payables Help Increase Your Cash Flow?

The increased efficiency brought on by integrated payables can help improve your company’s cash flow, particularly if you work with multiple suppliers or use various payment types. Integration can speed up processing and empower businesses to negotiate more favorable terms for goods and services based on early and reliable automated payments.

You’ll be able to track and monitor your cash flow through a unified system’s greater transparency. Essentially, your AP department can use analytics to root out redundant spending and increase your return on investment (ROI).

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Navigate Your Next Money Moves With a Financial Partner

Companies running manual payment processes may often experience lengthy processing times that are out of step with the pace of business in the digital age. Their cash is less accessible, as it spends more time in limbo. And their operating costs may be higher, too, because they’re manually performing tasks that could be completed automatically with less risk of error.

That’s why implementing modern treasury upgrades to your systems may be something to consider. It’s a value-adding proposition that can benefit your entire business ecosystem and help grow your business.

Our team at Bank of Blue Valley, a division of HTLF Bank is ready to help you navigate new business trends and optimize your working capital.