How vendor payment automation can save you time and money

Vendor payment automation is the process of streamlining your entire payment process, from invoice to bill pay, through the use of AP automation software. This process saves your team time by eliminating manual data entry, automating approvals, and ensuring payments are received accurately and on time.

With manual vendor payments, you’re more likely to see delays, mistakes, and frustration with vendors. This is not only bad for building trust with suppliers, but it can lead to inefficiencies with employee work, inflated costs, inaccurate reporting data, and just an all around bad time for finance teams who have to deal with every step in the process.

By automating the process you simplify everything for everyone involved. Not only do your vendors get paid quicker (which leads to better vendor relationships), but your employees can focus more on tasks that need more attention.

Above you have seen a brief look at why vendor payment automation is better than manual payments. But let’s break down a few of the top reasons why your business should consider implementing more automation.

1. Automate your payment processes

By automating vendor payments, you eliminate the need for manual data entry. That alone will save you significant time when generating invoices, and can save you from the types of manual entry errors employees are bound to make. Traditional manual processes are tedious, especially when your business begins to scale and the amount of vendor payments increases.

Let’s say a vendor sends you a PDF invoice with 20 line items for the work they’ve provided. Instead of having to manually enter that, on a platform like Brex you can use automated bill pay features that allow you to drag and drop it into your account. Brex AI then captures every itemized detail, suggests the matching PO, and drafts a payment for you. The hard work is done for you, all you need to do is check it over and approve the payment.

2. Improve efficiency and simplify workflows

Instead of wasting time pouring over every single line item on every single invoice, your team can concentrate on more strategic activities like vendor management and cost saving initiatives. By automating repetitive tasks with automation, employees can focus on the type of work that drives business growth. It may sound simple, but that’s because it is. Automation completes those annoying, everyday tasks for you, while providing incredible accuracy and visibility over your spending.

With the right software in place, you can automate vendor payments, and have the data instantly updated in your reporting. This makes it easier to view payables and payments in real time to keep AP teams accountable and on budget by tracking directly against your actuals. And with real-time dashboards you get a clear picture of upcoming payments, approvals, and vendor activity — which makes it easier to see who is providing value. The end result is improved efficiencies for your process, and simpler workflows for your employees.

3. Reduce human error

Manual data entry and approval processes open you up to a much higher risk of errors. In fact, one study by The Institute of Finance and Management found that 39% of invoices contain errors! And even if you catch them (which might not always be the case), it then takes more time to correct them. Vendor payment automation improves accuracy by eliminating the chance of human error. And with AI-powered receipt matching, software like Brex can identify potential anomalies or inconsistent numbers that need your attention before they cost you.

4. Enhance the security of payments

Traditional payment methods are a lot more vulnerable to fraud and loss, which poses significant risks. With the proper automation systems, you can send every payment confidently knowing it’s properly encrypted. This ensures that sensitive payment information is protected, and reduces the risk of any possible data breaches.

And if anything seems off? AI-powered software can actually recognize suspicious activity or potential fraudulent transactions, and flag them for your review. This could be anything from out of the ordinary purchase amounts, or payments that don’t match an existing invoice. Instead of having to track those issues down on your own, software like Brex will actually flag it for you.

5. Save time and resources

From enhancing your payment process, to simplifying approvals, to automatically flagging anomalous transactions — the best vendor payment automations save you time and peace of mind. A study by PayStream Advisors found that companies using automated invoice processing increased productivity by 33% and reduced processing costs by 42%. These savings allow your team to get back to more strategic work that actually moves the needle for growth, versus being bogged down in tedious manual work. That means more cost savings, improved financial performance, and a team that feels empowered to move the business forward.

Implementing vendor payment automation can significantly enhance your business's financial operations and vendor relationships. The following best practices offer a roadmap to streamline your payment processes, improve accuracy, and maximize efficiency in managing vendor payments.

Centralize your payment process

Centralizing your invoice management and payment approvals in one system eliminates the need for juggling multiple spreadsheets or email threads. When you integrate all your payments and payment-related activities into one platform, you can also improve your processes and keep a more accurate view of cash flow. For example, on a platform like Brex, you can receive a vendor invoice by email, drag and drop, or upload and the details will be automatically captured for you. Invoice matching will recognize if there is a corresponding PO, and then you can approve the payment amount. Once paid, the amounts will automatically be reflected in your account for accurate, real-time reporting.

Establish preferred payment methods

It’s important to work with your vendors to establish a preferred payment method. Certain methods like Automated Clearing House (ACH) transfers can offer significant savings compared to more traditional methods like checks. They’re also faster and offer lower processing fees. It’s also important to discuss payment timelines, as some vendors may offer early payment discounts, which can cut costs even more. Aligning with your vendors on preferred payment methods helps set clear expectations and can improve your cash flow management.

Implement strong internal controls

Implementing a framework of internal controls in accounting gives you more control over vendor payments, and establishes a repeatable process that makes everything easier to manage. These controls ensure there is proper oversight over payments, and can mitigate any risk of fraud, or more basic human errors. While there are various types of controls you can implement, let's consider one crucial example to highlight their importance.

Separation of duties is a key internal control that significantly enhances payment security and accuracy. This principle means that different employees would handle the invoice approvals versus the payment execution. It allows for more visibility and ensures that no single employee can falsely or inaccurately make a payment. This is just one example, but having an established process in place can prevent a lot of headaches down the road, and ensures you are future-proofing your payment process from any potential issues.

Develop efficient approval workflows

To expedite vendor payments, it’s important to establish efficient approval workflows. With the proper software in place, you can automate smaller invoices that need less oversight, and larger payments can receive a more thorough review. For example, Brex uses AI to read through your invoices and approve anything that looks accurate, while flagging anomalies on invoices that need more attention. This helps automate approvals and only requires attention on exceptions — allowing your finance team to focus on more important projects. Creating this type of efficient, fast, approval environment allows vendor payments to be more hands-off and less time consuming.

Utilize payment referencing and tracking

As your business scales, you will inevitably need to pay more vendors. The result of that means a lot more invoices and payments to track. And while you can absolutely use pen and paper, or a spreadsheet to track payment statuses, vendor payment software makes every step of the process a lot easier to monitor. With the right software in place, you can see real-time information on the status of each payment and invoice — ensuring that every payment is made on time. It also allows you to address any missed payments or wrong payment amounts in a timely manner. Most important of all, this type of tracking means that your financial records and reporting are truly accurate, which makes forecasting a lot more predictable.

Ok so you’re a pro at vendor payment automation. You know exactly what it is, and how incredibly helpful it can be for your business. The good news is that putting that knowledge into practice is incredibly easy with the help of Brex. With automation and AI you can manage procurement spend seamlessly across invoices and purchase cards, all in one place.

Here’s a breakdown of how simple vendor payments can be with the help of Brex:

1. Onboard vendors with ease

Brex allows you to enter your vendor's email address, and they will be a secure link where they can upload their payment details. That way, when you get an invoice from them, you can quickly and confidently pay them.

2. Automate invoice entry

You can automatically populate invoices by forwarding, emailing, uploading, or dragging and dropping them into Brex. This includes bulk invoice uploads. Brex AI will automatically capture every itemized detail, suggest the patching PO, and draft a payment for the specific vendor with their payment details.

3. Route it to the right approver

Tailor multi-level approval flows for every invoice based on the amount, vendor, employee role, and more. Brex will route it for approval automatically to ensure anyone who needs to see and approve the payment will. You can even leave notes on invoices and payments, and tag other team members in case something needs a closer look. The controls you have in setting up those approval flows allows you to simplify smaller payments, while keeping control over larger ones.

4. Pay with your preferred payment method

Pay by ACH, checks, and wires from any bank account. Or instantly create a virtual card in Brex and earn rewards on all your vendor spend. You can even use your Brex business bank account for even faster payments in more currencies. The bottom line is, you have the ability to automate and pay vendors in whichever way your business prefers.

5. Sync in real-time with your ERP

Your bill, payment, and vendor data will instantly sync with your ERP accounting system the moment you make a payment. This helps eliminate a ton of manual data entry, allows you to import and match purchase orders faster, and close the books with more confidence knowing every transaction is captured. Brex has award winning integrations with ERPs like NetSuite, along with Xero, Sage Intacct, and more.

And that’s it. From invoice to payment to reporting, Brex helps simplify every step with automation. This helps eliminate manual tasks, ensuring that all payments are made on time — improving cash flow management and reducing any risk of late payment penalties. Win-win.

Implementing vendor payment automation is more than just a technological upgrade—it's a strategic move that can transform your financial operations. By automating your payment process, you're not only saving time and reducing errors, but you're also positioning your business for scalable growth.

With solutions like Brex, the transition to automated vendor payments is smooth and user-friendly. From effortless vendor onboarding to automated invoice processing and customizable approval workflows, every step is designed to enhance efficiency and accuracy. The real-time synchronization with your ERP system ensures that your financial data is always up-to-date, providing you with the insights needed for informed decision-making.

As businesses continue to evolve in an increasingly digital world, those who leverage intelligent automation tools will stay ahead of the curve. Vendor payment automation isn't just about keeping up with technology—it's about freeing your team to focus on strategic initiatives that drive your business forward.

Ready to experience the benefits of vendor payment automation firsthand? Don't just take our word for it. Schedule a demo with Brex today and discover how our tailored solutions can revolutionize your payment processes, improve vendor relationships, and contribute to your company's financial health and growth.