Looking forward to Q3, many financial institutions are now faced with the challenge of ramping back up to full operational capacity. Mid-sized banks and credit unions are focusing their efforts on getting business back on track and employees safely back to work, while continuing to meet their customers’ pressing needs.
As financial institutions have worked to provide essential services to clients and members during these critical times, they’ve also had to ensure that vendors continue to get paid on time and, in many cases, transition entire teams to telecommuting.
During uncertain times when working on-site wasn’t always an option, financial institutions with automated accounts payable systems were able to achieve continuity. Banks still tied to outdated, paper-heavy processes experienced greater challenges and service disruptions.
A More Efficient Way to Move Forward
As accounting teams move back into the physical workplace, forward-thinking FIs are taking advantage of a more efficient way to process accounts payable.
Is your AP department still attempting to process payments manually on top of navigating the transition back to the workplace? If so, there couldn’t be a better time to go paperless. Automating AP will help you cut costs, streamline efficiencies, minimize AP errors, and optimize your workforce as you return workers back to the branch.
Cut Costs & Lower Operating Expenses
Automating AP helps banks save money and minimize expenses. For example, while it costs $4.50 or more to manually process a single paper check (including postage, printing and labor), electronic payments can cost as low as $.89 per payment.
Manually processing AP is a slow and cumbersome process that can result in costly payment delays. Slow processing often leads to late fees, and can prevent FIs from taking advantage of early-payment discounts and incentives that can amount to significant cost savings over time.
As you aim to get your financial institution back up to full operational capacity, there’s little room for inefficiencies that work against a sustainable trajectory for the business’s bottom line.
Maximize Operational Efficiencies
Has manual AP processing strained operations for your FI in recent months, when key team members could not physically access the branch?
AP professionals who manually process payments deal with a high volume of paper, a slow invoice approval routing system, and lengthy approval times. Not to mention the endless hours spent manually printing checks, stuffing envelopes, and entering data into spreadsheets.
Automating accounts payable enables you to digitize invoices, which streamlines efficiencies at multiple touch points and makes data easily accessible in real time. Invoices and expense reports can be accessed and approved at any time, from any device with an internet connection.
With automated AP, invoice reconciliation and remittance are also processed automatically. The ability to access detailed, customizable reports gives you greater control over your GL and enables strategic planning based on valuable insights gathered in real time.
The same technology that smoothed the transition for many FIs to remote working is now making it easier for them to transition back to the branch.
Minimize AP Errors & Fraud
Manually processing payments for all of your vendors is not only expensive and time-consuming, it’s also risky.
Overtaxed AP professionals in small accounting departments may be prone to payment errors, which can be costly in terms of both hard costs and the time required to correct mistakes. Automating AP can prevent duplicate payments and reduce data entry by 50 to 95 percent, which helps minimize errors.
Automation also provides a greater degree of fraud protection around sensitive supplier bank account data, limiting liability associated with check fraud. Encrypted electronic payments and other added security features provide sophisticated fraud protection.
Optimize Your Workforce & Mitigate Risk
As redundant, time-consuming tasks are reduced or eliminated from the back office, employees are able to leverage their expertise and focus efforts on more productive activities.
Rather than being bogged down tracking supplier payment preferences or following up on uncashed checks, AP professionals are free to focus on revenue-generating initiatives that can contribute to sustainable growth within an increasingly competitive marketplace.
The ability to reallocate human resources to various other responsibilities also offers risk mitigation during times of disruption. For example, is your bank ready to respond to the uptick in service requests associated with PPP, EIDL, and other SBA-backed loan programs?
By eliminating time-consuming, manual tasks that can easily be automated, you ensure flexibility in the event that AP professionals are required to assist in other mission-critical areas.
Automating AP optimizes efficiencies and enables employees to contribute in a way that provides the most value to the overall business. This will prove especially important as mid-sized financial institutions move workers back on-premise and leverage all of their resources to serve customers while ensuring a stable and profitable future.
Connect with one of our team members to find out how accounts payable automation can immediately benefit your bank or credit union.