Transferwise accounts payable
Transferwise accounts payable – Accounts payable automation – commonly shortened to AP automation – describes the ways businesses can reduce and streamline manual processes involved in paying invoices and suppliers. AP automation is used to reduce admin time, and can also result in lower costs and fewer errors.
This handy guide to getting started with AP automation will cover all the basics you need, as well as introducing the powerful open API from TransferWise as a smart way to automate payouts.
Get your TransferWise business account for free online to benefit from the option to automate invoice payments, payroll or recurring transfers – and more – using the API. More on that later. First, the basics.
With the proper AP automation processes in place, your business could save money and run more smoothly. You’ll also free up your employees by reducing the administrative burden, giving them more time to focus on true value adding activities. Here are a few of the key benefits to consider, if you’re thinking of starting to use an AP system.
A typical accounts payable process will mean suppliers sending in invoices in a range of formats, from varying electronic document types, to old fashioned paper statements delivered by mail. These then need to be manually cross checked against purchase orders and delivery notes, approved and paid. The process might be even more complex when dealing with payroll or employee expenses, as exceptions may need approvals before they can move through the system. This can result in an excessive amount of email correspondence and paperwork landing on the desks of senior employees.
Moving to an automated AP system helps to reduce the time spent on mundate administration. AP automation systems can match invoices and purchase orders automatically, to make payments more quickly and without as much manual intervention.
No matter how strong the focus on employee training, it’s inevitable that human error will creep into business processes. Even the best team members have the occasional off days at work, key employees leave, or your AP department may be short-handed due to sickness. And the more manual intervention a particular process requires, the more chances there are for errors to occur.
Maybe a document required for payment approval ends up on the wrong desk, an invoice query goes to your spam folder, or a simple typo results in a supplier transfer being sent to the wrong account. These errors can mean your team waste time chasing documents, tracking missing payments, and following up correspondence, instead of using their time on value adding work.
By automating your AP processes, you’ll be reducing the likelihood of human errors, saving time, stress, and potentially money. And by cutting out the frustration of correcting payment issues, you’ll likely also find your accounts payable team will be happier and more engaged at work.
You might find that you need to invest a little in getting the best AP processes and systems in place for your business. But this investment can very quickly pay dividends.
Business owners who move to AP automation often find that they need to dedicate fewer employee hours to administration, thanks to the streamlining of processes and reduction in payment errors. You could also benefit from early payment discounts by having your supplier invoice payments automated, so they’re paid as soon as they arrive.
With international suppliers, or if you have employees based overseas, you could save even more by opening a TransferWise business account and using the open API to automate cross border invoice and payroll payments. TransferWise offers international payments using the mid-market exchange rate, and with low transparent fees. This can result in a considerable saving compared to using your regular bank. More on that a little later.
Arguably the biggest potential benefit from using automated AP processes, is that your team are likely to be able to focus their time where it really matters, instead of chasing paperwork and fixing errors. Throw in the fact that reducing the administrative burden may mean your staff are more engaged and motivated – and simply happier in the workplace – and you could see some real productivity gains which give your business a boost.
Depending on the needs of your business, you can automate some or all of the AP process, from the moment an invoice arrives, to approval, payment and record keeping. Here are some processes you might consider automating:
- Automating recurring payments and payroll
- Sorting, categorizing and routing invoices
- Approval processes for invoices and expense claims
- Matching and validating invoices against purchase orders
- Data entry and checking, including general ledger categorization
- Tracking exchange rates for international payments, and automating currency conversion
The best way to go about automating your AP processes will depend a little on your specific business needs. However, here are some broad general steps you’ll want to consider.
Before you dive into different software options, you’ll need to invest some time looking at the AP processes which are most frequently used in your accounts payable team. Talking to your AP team will give you ideas, and you can also look at data such as the time taken to process an average payment, error rates and the costs of different AP activities. This will help you to identify high volume activities and bottlenecks, and show the areas where automation may bring the most benefit.
Once you know which processes are your priorities for automation, it’s time to consider how you might start to move to a more advanced AP system while limiting the risks. Consider whether your existing technical capabilities are sufficient to design and implement an AP automation roll out programme. You might decide to bring in some specialist help to make sure you’re designing the optimal AP workflow, and managing the transition smoothly.
Whatever AP solution you decide to use, you’ll need to be able to integrate it into your existing Enterprise Resource Platform (ERP) to get the maximum benefit with the least possible upheaval. The good news is that, no matter what types of invoice you’re dealing with, and no matter which ERP you currently use, you’ll find an AP automation partner out there with a bit of research.
When you’re choosing AP software, you’ll want to look at the features, benefits, and costs, and consider how they’ll meet your business needs now and in the future. There are several large, well established accounting and AP automation providers out there, as well as many more niche products which are aimed at specific business types. Here are some popular options, to give you a starting point in your research:
- QuickBooks – with a wide range of pricing options and plans designed for businesses of different sizes, self employed people and entrepreneurs
- Xero – online accounting solutions for small businesses, with handy integration options to link automatically with your TransferWise business account
- Procurify – AP process automation including 3 way checking, approvals and cost allocation between departments.
- Sage 50cloud – long established accounting partner, offering simple plans for a single user at around $50/month, through to more advanced options which come in closer to $200/month
When you start looking into TransferWise accounts payable automation partners, you’ll quickly find that there are many different options, which offer plans and packages with different features and fees. Some will automate a full range of AP processes, while others focus on specific transaction types.
Some AP software allows you to send and receive payments, including cross border transfers to settle international invoices and payroll. If you’re considering this option, it’s worth looking closely at the fees and exchange rates used for overseas payments, as these can eat into your profit margin.
An alternative option for businesses working with overseas suppliers, customers and employees, is to use the open API from TransferWise, linked to your TransferWise business account as a smart way to automate payouts and cut costs.
With the TransferWise accounts payable API, you can automate recurring transfers, invoice payments, standing orders and payroll costs, make expense reporting simple, and track and automate currency conversion. And because it’s TransferWise, you’ll know that you’re getting the mid-market exchange rate with no markup, for safe, fast and cheap cross border payments. You’ll only need to pay a small fee per transaction, with no monthly service fee for the account, and no minimum balance to worry about.
Get more details about how TransferWise can support your business, with this comprehensive guide to using the TransferWise API.
See if you can save time and money for your business with the smart solutions for entrepreneurs that come with a TransferWise business account.
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Transferwise accounts payable