In a webinar hosted by IOFM, Routable’s Co-founder and CEO Omri Mor shared his expertise and insights on high-volume AP with moderator Mark Brousseau, President of Brousseau & Associates who specializes in AP and document automation. Focusing on key growing pains of finance departments, "Looking Ahead: How to Choose the Right Platform for High-Volume AP" illustrated the key signs your AP department may need a payment platform and explored what to look for in a platform to best suit your high-volume payment needs.
If you didn’t get a chance to join Omri and Mark, we’re sharing the key points of the webinar here.
High-volume AP, sometimes referred to as mass payouts, occurs when a business outpaces its capacity to reasonably manage outgoing payments to vendors. It’s the difference between businesses that process zero to 100 monthly payments and businesses that may process anywhere from 500 to 5,000+ monthly payouts (e.g., real estate, the gig economy and online marketplaces).
Without a system to ease the strain, high-volume payables causes delays due to missed or ignored approvals and errors introduced by overwhelmed finance teams, leading to supplier frustration.
Taking center stage in the discussion were the possible differences between pre-pandemic AP cycles and what we see today. When asked if these challenges were the direct result of businesses transitioning to a more remote workforce, Omri agreed that while AP scaling has always been a source of pain points, the increase in the use of remote resources to complete payment cycles has added obstacles. Without a centralized source of truth—a high-volume payments platform—finance teams are taking bigger risks sharing .csv files via email, which introduces data errors and payment confusion.
According to Omri, the biggest question CFOs need to ask themselves today is whether their AP workflows will continue to be efficient as the business grows. Take approvals, for example. Nearly 70% of webinar attendees said they incorporate between two and three approval levels, which Omri explained are likely made up of payment approvals (i.e., Should this vendor be paid?) and an amount approval (i.e., Is this amount OK to pay?).
For some business models, this leaves stakeholders with a manageable list of approvals on a monthly basis. But imagine handling email influx for hundreds or even thousands of approvals. Omri strongly encourages proactive evaluation of current business practices to determine if a payment platform is the right fit. And beyond that, finding the right platform that doesn’t force your process into rigid, predetermined workflows but rather supports and “supercharges” your current process.
You’ve recognized the growing pains, but you’re still not sure if a high-volume platform is right for you. Omri suggested keeping an eye out for these signs:
The right payout platform reduces manual labor by 70% (a number Routable has seen with some of our customers). That’s nearly 30 hours in an average workweek. Imagine what your finance team could accomplish through forecasting and analytics instead of scanning spreadsheets.
A centralized onboarding experience offers privacy and security for vendors to keep them in the loop and confident, meaning you can leverage for better SLAs and competitive advantage.
84% of businesses are unhappy with the syncing limitations between their accounting software and ERP systems. The right AP platform offers two-way syncing in the programs you're already using for real-time, reliable data.
When you’ve determined that an AP platform is just what you need to better manage your high-volume payouts, Omri recommends looking for the following criteria:
You shouldn’t have to sacrifice your existing processes just to have a high-volume AP platform. Supercharge your systems, don’t change them.
Meet your vendors’ needs through visibility and payment preferences, even if it’s a specific USPS stamp! And work with a payment platform that allows you to elevate your own brand, building confidence with vendors that they’re working with you, not a third party.
From currency support to vendor tracking, a payment platform should take the guesswork out of payables. Yes, even those Nacha return codes. Empower your AP team with visibility and accessibility.
Keeping sensitive vendor financial data secure is critical in a digital landscape. A good AP platform ensures data encryption and PCI-DSS compliance for safe, secure transactions.
Want to learn more about accounts payable automation? These resources will get you started:
For some companies, using a payment aggregator simplifies the digital payment process significantly, though the method may not be for everyone.
Accounting automation sounds intimidating, but ultimately will empower and assist financial teams in focusing on the tasks that matter most.