January 6, 2025 Find Benefits in Automating Accounts Payable Processes

Manufacturers who understand that automation isn’t all AI and robots can increase efficiency in financial administrative tasks.

By Ashley Hayslip – Market President, San Diego, Enterprise Bank & Trust, Member FDIC

When most people think of automation, emerging tools including AI, robots and “smart” technology come to mind. Associating these concepts with automation is not inaccurate, but automation can happen without a lot of investment in relatively new technologies or skill development.

Even without an evolving technology strategy that attempts to leverage AI, today’s manufacturing operations can require significant training to keep up with innovation and advancement in machines and equipment. While many businesses can find improvements to make on the production line, one often overlooked approach to creating efficiency can happen in the back offices by taking advantage of conventional automation that has long powered organizing, accounts and reporting processes for successful companies.

Payables automation demonstrates how to automate without AI

As many manufacturers continue to assess the risk of new technologies, administrative platforms and software already in use may offer untapped process automations to explore. Software that tracks spending categories on a bank credit line or summarizes volume of sales in an invoice platform are long-standing examples of automation tools that do not require specific AI adoption.
In particular, automation in the accounts payable (AP) process can allow suppliers to submit invoices automatically, increase visibility in approval processes and speed up disbursements. This is true for any business doing more than 100 transactions a month that wants to eliminate the cost and fraud risk from traditional checks, pursue growth without the need for additional administrative headcount and have access to better analytics.

Given the current hiring challenges facing many business owners, training and paying additional staff members to continue a potentially inefficient invoice process is not an ideal solution. An inefficient payables process can lead to unnecessary expenses and losses that affect a company’s bottom line.

The AP process can look very different depending on the size and nature of a manufacturing or industrial operation. Especially when experiencing growth, navigating a busy season or closing out annual reporting, “there must be an easier way to do this” has probably been discussed.

Or, a business may be preparing a budget and business strategy for the new year and looking for ways to optimize the administrative team and lower operational costs. When looking for how and what to optimize, the AP workflow process is often overlooked.

Fortunately, there’s a solution.

Utilizing an existing accounting/ERP system, a business can enhance and automate the AP processes using an invoice-to-payment automation technology platform. Traditional AP processes are often manual, paper-based and not organized for growing businesses. These tech platforms can automate the AP process, connecting with accounting systems already in use. Such a platform offers an affordable, integrated and secure end-to-end solution that streamlines the process, and provides greater control over workflows and cash management capabilities.

Benefits of automating an existing payables process

Whether striving to reduce vulnerabilities, increase efficiency or grow an operation, there are several benefits for businesses that want to automate their payables process without turning to AI-powered technology. Here are five reasons a manufacturer should consider automating accounts payable through the use of technology:

1. Automating payables means the internal team will have more time to dedicate to critical operational matters. Whether a person is solely responsible for payment processes or a business owner is juggling several day-to-day operational tasks, the manual process of routing and entering paper invoices takes time away from other business matters.
2. Enjoy increased control and increased rebates. A larger monthly rebate generated from credit card spend can be expected, which in turn helps convert the AP department into a revenue generator. With technology in place, significant savings on normal AP costs can be achieved. With improved efficiency and methodic systemization, the business or organization will have greater control over outgoing cash flow.
3. Automated payables eliminate the need for paper checks. This allows a CFO/owner to digitally sign checks. This flexibility and convenience not only benefits executives who might be out of the office or needed on the work floor, but also enables easier digital recordkeeping and reconciliation of accounts. Instead of spending time tracking down the necessary approvals, the technology platform helps manage approvals and notifies the necessary individuals when their action is required.
4. The platform directly integrates with your bank and allows for direct payment to vendors. Conveniently, there is no need for intermediary payment accounts, which lowers the risk of falling victim to online fraud. Because of the way transactions are generated and thanks to the integration with fraud protection tools like Check Positive Pay and ACH Positive Pay, the risk of online payments fraud is mitigated and the business is better protected. Other fraud prevention tools available in automated processes include dual control authorization and two-factor authentication.
5. Tech platforms often have experienced financial services teams managing them. A dedicated team can work with a business to set up and integrate the existing process and structure and can provide service for unique needs.

To determine if a business is taking advantage of all the technologies available to streamline its account processes while mitigating risk, a quality financial services institution should serve as a partner to all manufacturers. Owners and executives should explore operational technologies by taking an inventory of current systems and processes and asking questions about what opportunities might exist to handle financial needs in a more efficient and cost-effective manner.

Operating a successful manufacturing or industrial business requires balancing a variety of priorities, and an efficient payables process can allow owners to invest their hard-earned time and money into what matters most.

About the Author:
Ashley Hayslip is San Diego Market President for Enterprise Bank & Trust. Hayslip leads the Relationship Management and Business Development teams to expand the bank’s client base, reinforce and grow the bank’s culture, and develop community and nonprofit partnerships in the region.

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