Running a business involves more than strictly following your passions. It also has its more mundane sides like paying the bills and invoice processing. Also known as invoice management, invoice processing is the series of steps taken by a business to handle incoming invoices or bills. It includes receiving, approving, paying, and recording invoices in your books.
Having set procedures in place for invoice processing ensures your payment process is smooth and your vendors are happy. Relying on paper records and manual methods for invoice processing (like so many businesses still do) makes it more likely for things to go wrong. Keep in mind that invoices that aren’t paid on time due to a cumbersome process can interrupt your incoming flow of supplies and harm your relationships with vendors. So, that’s something you really want to avoid.
The good news is that digital accounts payable (AP) tools can help you simplify invoice processing and ensure your payments don’t hit a bottleneck.
How digital AP tools simplify invoice processing
You’re probably familiar with the benefits of using digital tools to handle your personal bills. So let’s apply the same logic to your business bills and invoices: The less you need to manually keep track of things, the smoother your invoice processing workflow will go.
Here are a few ways you can use digital AP tools like Melio to simplify invoice processing.
1. Stop manually processing payments
The most important part of invoice processing is making accurate and timely payments. Walking away from manual payment methods and paying all of your bills online is a great place to start.
This enables you to manage all of your invoices in one place so you always have a clear overview of all your finances and never have to guess the status of any bill.
This also saves you time, as manually sending out payments and switching between payment methods is an error-prone task that’s also a real time suck. With a tool like Melio, you can use your preferred payment methods without affecting the way your vendor gets paid and you can do it all on the same platform.
2. Schedule payments in advance
You can use digital AP tools to schedule your payments ahead of time so you never miss a beat. This allows you to take care of all your soon-to-be-due invoices in one sitting and know exactly when each payment will go out. Now that’s efficiency.
3. Start delegating
As a business owner, we’re sure you have enough on your plate without worrying about invoice processing. If that’s the case, consider delegating this task to members of your team so you can focus on growing your business.
Delegating doesn’t mean you’ll lose control of what’s happening with your invoices and AP. Setting up the right process for your team can include workflows that determine what types of payments you want to review before they’re sent.
Like most things, setting up payment approval workflows is easier done with a digital tool. You can use Melio to assign roles and permissions to members of your team or even an outside accountant and set thresholds for payments requiring approval. This helps you easily maintain transparency and timely payment cycles, without ever losing control over the process.
4. Enjoy better visibility to keep your cash flowing
Knowing what expenses are around the corner is central to maintaining a realistic budget and keeping your cash flow healthy. AP software gives you better visibility and control so you’re never caught off guard by money coming out of your account. Keeping enough cash reserves is crucial to ensuring your invoices and payments are processed on time.
It’s time to bid farewell to chasing paper trails, making late payments, and enduring headaches from the stress of it all. Sign up for Melio and follow our four tips to improve invoice processing and ensure your business is running more smoothly.
*This blog post is intended for informational purposes only and is not intended as financial advice.
**Melio does not provide legal, tax or accounting advice, and you should consult with a professional advisor before making any financial decisions.