Relying on technology has become a necessity to help your business flourish and stay ahead of your competitors. As a result, companies around the world integrate different software in their working environment for better results. Accounting and Finance are two such aspects that have seen an influx of technology in recent years to make it fast, reliable and error-free.
Payment management software does exactly this through several automation processes and makes all the functions of the accounts payable workflow work seamlessly, without the need for manual intervention.
In this article, we give you a detailed guide about the payment management software and its features that will benefit you in the long run.
What is a Payment Management Software?
It is a cloud-based platform that seamlessly integrates with an ERP accounting system to make it a cost-effective method to track, make and maintain payments. Such an online payment management system automates the payments for suppliers, streamlines the account payable process, reduces frauds and securely formulates audit trails. Moreover, since the software is cloud-based, it can be accessed through an Android or iOS mobile device, helping you operate on it on-the-go, as well.
One of the best things about such software is that is ideal for all levels of companies, be it a small business with 20 or more people, mid-sized companies or large enterprises that have multiple subsidiaries under them. You just need to have the right resources to scale the software following your growing business.
Which aspects of the accounting system should be included in it?
Most top payment management software out there covers almost all the variables included in an account payable system. The following are some of the key pointers that will help you understand the tasks such software should be able to perform.
- It should handle getting approval authorizations whenever required, before making a payment.
- It should handle individual contractor payments and the corresponding tax reports.
- It should function as a recurring payment management system, which can process and make the payments for recurring invoices.
- It should be efficient enough to validate the vendors and their invoices with the help of the “Do Not Pay” lists and the tax ID numbers. As a result, you will be able to avoid fraud or duplicate invoices.
- It should be able to create insightful reports of disbursements and cash requirements so that you can improve spend management and cash flow. For this, it can come up with an account payable turnover ratio by analyzing all your expenditure to give you a better understanding.
- Efficient software should be able to reconcile all the payments to the general ledger system so that you can close the accounting books of each month on a timely basis.
How does it work?
The first step in the whole process is the self-service supplier onboarding, where the vendor uses a designated digital portal of your company to enter their details. They have to put in information like contact details, official tax returns form, applicable tax from the information, preferred payment method and the currency in which they want the payment.
Post this, the billing process starts where vendors upload their invoices that instantly become available in the accounts payable system. The vendors can upload these invoices either through payment management portals or e-mail it to you which then should be uploaded in the system electronically. It then matches the invoices with electronic purchase orders and receipts and receiving reports before clearing the payment.
To do all this efficiently, the payment management system uses Artificial Intelligence and Robotic Process Automation. It not only automates the whole system but also streamlines the workflow in the right manner.
What are the essential features that you should look for while buying such software?
● Customer support and implementation services
The software company that you are buying from must have a top-rated customer support program. While using a new payment management software, you naturally will have a lot of questions be it regarding vendor invoice payment process, real-time reporting, available analysis and so on. Therefore, the company should be available to answer your queries whenever you want.
Another thing you need to ask the company is how long it will take to successfully implement the software in your existing system. The initial setup may take a week but the whole process may take a month or more. The average taken for this is four weeks but there are efficient software companies who can do the job in approximately 10 days as well.
● Self-service supplier onboarding
The software should support the self-service supplier onboarding process, as it is more secure than manual keying of information. Furthermore, it helps in preventing fraud and improving internal controls. The software should inform the vendors about when the payments will be done. As a result, you can save yourself from those inbound vendor calls, making your account payables team happy about it.
● Automated network of cross-border payments
The software should be able to support cross-border payments across different payment portals. It should have credit card payments, debit card payments, different online payment apps like PayPal and other wire transfers, cheques and so on. This way, you will be able to accommodate more vendors under one umbrella as you will be able to make payments in their preferred manner.
● Audit Trails and Fraud Reduction
The software should be efficient enough to create audit trails and reduce fraud in the system. For this to happen, it should be able to verify vendors, identify inactive vendors, avoid duplicate invoices, provide a secure payment process, record everything in the ledger on a real-time basis and leave audit trails. Buying such efficient software will help you secure the whole system in the right manner.
A payment management software can reduce the accounts payable processing by 80% and the time taken to close the accounting books by 25%. With such an increase in efficiency, your accounts payable team will be much more capable to take up more important tasks and be motivated to perform well.
To buy such a payment management software, you should get in touch with ClearCycle, a company that provides solutions for managing accounts payable systems in an automated way.