6 Ways to Improve Invoice Payment Processing in Your Supply Chain
The evolution of technology has made traditional means of accounts payable obsolete since digital payment processes bring greater efficiency and reliability. Manual, paper-heavy forms of payment were once the easiest way to complete invoice payments, but not anymore. Technology has enabled electronic payments, making it much easier for companies to streamline and automate their supply chain payment processes.
Accuracy and efficiency in your payment process lead to financial predictability, which can help manage and increase available cash flow. If your company is processing payments the traditional way, you’re not alone; 97% of organizations are still making check payments to a portion of their suppliers.
With the right payment technology in place, here are some reasons why making the leap to electronic payments will be worth it for your company:
Paper-based accounts payable is an error-heavy and time-consuming system. Companies often run into late or fraudulent payments when they are not up to speed with more efficient payment processing methods. It is much easier to commit fraud with check payments than with digital payment methods, which often have several layers of verification. Electronic payments are difficult to alter or expose to fraud, and they also allow for faster, more accurate payments, so they have become the safest and most efficient way to improve payment processing for any company.
Efficient and Timely Payments
Streamlined payment processing ensures that your payments to shipping carriers are timely and efficient. There is no worrying or miscommunication as digital payment methods alleviate the risk of accidentally making a late or incomplete payment. An automated payment process helps your company meet its cash management objectives and can strengthen the relationship between you and your carriers.
Strengthen Carrier Relationships
In addition to becoming more successful in predicting and meeting cash management objectives, your company is more trustworthy to your carriers when you have a reliable payment processing source. A satisfactory experience with payment processing will strengthen your carrier relationships and, when you bolster this system, you can help each other grow.
Automated payment processing can also help to reduce the work for your internal accounts payable team. Traditional payment processing requires a paper system of reconciliation and confirmation that is very time-consuming. When the invoice payment system is electronic, it reduces the number of requests this department receives. This saves your accounts payable team precious time that they can spend on more valuable business opportunities since the payments are now automatic and instant.
How to Improve Invoice Payment Processing
1. Have the right Freight Audit and Payment services
Freight Audit and Payment (FAP) is where most companies begin with transportation spend management and invoice payment processing. It requires, at minimum, the traditional form of payment processing, where bills are audited by hand. But this could be a cause for frequent miscalculations if always completed manually and if your company hasn’t partnered with a Freight Audit and Payment partner.
Freight Audit and Payment (FAP) services can ensure accuracy and cultivate deeper insights into your payment processing. These service options include outsourcing to an FAP provider, using an internal team in your company dedicated to processing FAP, using transportation management software (TMS), or implementing transportation spend management solutions that use proper FAP as the foundation.
Outsourcing your FAP to a provider with transportation spend management capabilities means gaining contract optimization support, supplier and employee compliance, network optimization, and load consolidation, which are all critical value drivers that can result in immediate savings.
2. Prioritize payment requests
Overhauling your payment processing system isn’t something you can pull off overnight. Though it takes time to switch to an electronic system, there are still ways to improve your company’s payment processing in the meantime. Take a step further to streamlined payment without requiring high-tech solutions by analyzing your company’s payment requests and identifying your priority charges. If you have debits requiring higher priority, set up a faster approval process to promptly complete the payment.
3. Implement card payments
If your company solely relies on bank transfers, it might be time to implement card payments, or at least an invoice system that accepts card payments. Using card payments is an efficient, accurate, and accessible solution. This method doesn’t require a problematic change in your company and alleviates the risk of human error.
4. Leverage data and analytics
Improve invoice payment processing by using your data and analytics. This process requires leveraging all existing accounting systems and bank relationships. You can do this by combining accounts payable data points with third-party figures to digitize invoice receipts and supply chain payments. Doing so can help organize and catalog transactions, as well as find different payment solutions for suppliers.
The right solutions for different payment methods can strengthen the convenience of card payments or other electronic payment methods. It strays from the traditional forms of payment to find new structures that bolster your company's reliability and support stronger carrier relationships.
5. Use automation
The automation process goes a step further than electronic invoices. An automation system assists with your invoice processing and automatic approvals, giving accounts payable the ability to filter invoices and send them to the correct people.
Automation also helps accounts payable streamline and digitize everything so that it’s all properly visible and communicated. The end goal of automation is having payments made automatically with the correct procedures and amounts. Automation saves the accounts payable department time and resources by supplying the proper communication tools and outcomes.
6. Implement payment technology
Avoid snags in the payment process and access enhanced data in that business’ preferred format with payment technology.
This method enables precise communication and makes all of your payments quicker. Technologies, like TraxPays, enable the switch automatically to help your company gain a smoother payment process. TraxPays alleviates all parties’ concerns over the transition by consolidating your payment information and simplifying your payment processes.
Get Started with TraxPays
Trax is here to help you get started on improving your invoice payment services. TraxPays is an invoice payment service that handles all of your carrier payments with ease. TraxPays does this by collecting your carrier’s invoices and processing them swiftly and accurately. TraxPays ensures that your payments are completed promptly, not completed too far in advance but also never late.
TraxPays provides updates and notifications, sending you weekly funding requests through an automated system. These proposals cover the amount you need to pay and what the payment includes so that you’re always in the know about your company’s supply chain finances. Once the request is fulfilled, TraxPays ensures that the payments are issued to your carriers promptly. Trax will report each step along the way, providing you with complete visibility throughout the payment process.
TraxPays helps streamline your company’s payment process by discarding individual card and bank payments, and abiding by differing legal or corporate requirements so that your company doesn’t have to. Our automated system collects all the information from your company’s carriers and brings it together into one, easy-to-read funding request for your company to fulfill.
TraxPays is dedicated to ensuring efficient and timely payments to your carriers, reducing your workload, and improving your relationships with your carriers. Contact us to get started with TraxPays today.
Trax is the global leader in Transportation Spend Management solutions. We partner with the most global and complex brands to drive meaningful optimizations and savings through industry-leading technology solutions and world-class advisory services. With the largest global footprint spanning North America, Latin America, Asia, and Europe, we enable our clients to have greater control over their transportation performance and spend. Our focus is on your success.