Small- to medium-sized businesses (SMBs) must often cope with slim operating margins and limited resources, and these two pressures make it essential that they closely monitor their cash flows.
Doing so can help them determine if they have sufficient funds available to pursue investment opportunities or whether they need to hold onto their cash to meet upcoming vendor payment obligations. Insufficient cash flow insights can cause SMBs to either miss opportunities or overspend and delay vendor payments, thereby damaging relationships.
Reliance on manual, paper-based accounts payable (AP) approaches can make it difficult for SMBs to receive detailed examinations into their spending and payment obligations, however. AP staff may struggle to quickly sort through and examine physical documents to find relevant details, for example, and the lack of real-time data can make it harder to identify opportunities to promote cost efficiencies.
In the July Next-Gen AP Automation Tracker®, PYMNTS examines how digitization and AP upgrades can help SMBs reduce costs and receive detailed, up-to-date financial information to better inform spending strategies.
Around The AP Automation World
AP automation can save companies significant amounts of time. One Australian financial services company recently reported that it accelerated its invoice processing by adopting a fully digital AP system. The firm said manually processing a single invoice used to take up to 37 minutes but that automation trimmed that figure to 11 minutes.
Digital tools can also help companies catch errors that staff might miss when sorting through paper documents. Suppliers sometimes misapply payment terms in their invoices, for example, prompting buyers to overpay. These errors can be costly, but some AP teams are now leveraging artificial intelligence (AI) solutions to help them review and check the accuracy of suppliers’ invoices.
The transition to using more digital tools can be a bumpy one, however. Some businesses that have traditionally clung to paper-based methods have struggled to readjust their AP practices and enable staff to work from home during the pandemic. A recent survey found that some AP teams first had to focus on ensuring staff had the equipment and technologies to enable remote work, while other teams were more concerned with defending against fraud.
For more on these and other recent headlines, download the Tracker®.
Catering To The Cross-Border Fruit Trade’s AP Demands
Fruit importer-exporter companies can have complicated payment needs. They must compensate growers around the globe but only after assessing the shipments they receive to account for various factors that can affect the cost. This means even fruit that has the same stock keeping units (SKUs) can be priced differently depending on each item’s condition.
The fruit market is also a volatile one, and every player in the supply chain typically shares in the losses if prices fall before grocery stores and restaurants can sell to end customers. Importer-exporters therefore may not know exactly how much they will pay suppliers — or receive from clients — until those clients bring the goods to sale, explained Juan Gonzalez Pita, founder and sales director of international fruit importer-exporter Salix Fruits.
In this month’s Feature Story, Gonzalez Pita tells PYMNTS how the sector’s unique payment needs require the use of industry-tailored business management and AP software. He also details how the right AP offerings can support small businesses as they grow and develop new goals.
Find the full Feature Story in the Tracker.
Deep Dive: Building A More Efficient, Insight-Rich AP Process
SMBs must carefully monitor their cash flows to stay afloat and grow their businesses, meaning they require efficient AP processes that give them the data necessary to inform their business decisions.
This month’s Deep Dive examines how AP insights can help SMBs decide when it is more advantageous to pay suppliers early to earn discounts and when it is better to hold onto their funds.
Download the Tracker to read the Deep Dive.
About The Tracker
The Next-Gen AP Automation Tracker®, a PYMNTS and Bottomline Technologies collaboration, is a monthly report highlighting the most recent accounts payable developments and automated solutions disrupting how businesses process invoices, track spending and earn rebates on transactions.
Selected by Fintech Tube