Vendor Payment Automation: 5 Reasons To Make The Switch

Key takeaways

• Automate your vendor payments to cut manual data entry, reduce errors, and free up your team’s time.
• Choose the payment method that fits your cash flow, and pay vendors the way they prefer.
• Gain real-time visibility into every payment so you can control spend and spot fraud early.
• Get started without IT help, since modern payment tools are quick to set up and easy to run.

What is vendor payment automation?

Vendor payment automation is software that pays your suppliers for you. It handles everything from the moment an invoice arrives to the moment it is paid and recorded. It takes over the manual work your team used to do by hand, like entering invoice details, routing approvals, and writing checks.

Instead of juggling spreadsheets and paper, you get one place to review, approve, and send payments. Your vendors get paid on time, and you keep a clear record of every payment.

How vendor payment automation works

Automation runs your payments in the background, following rules you set once. A payment that used to take days can be ready in minutes.

1. Capture the invoice: The invoice is pulled in from email or a vendor, and the details are read for you.
2. Route for approval: The right person is asked to approve, based on rules you choose.
3. Send the payment: The payment goes out by your chosen method, like bank transfer or card.
4. Reconcile automatically: The payment is matched to the invoice and synced with your accounting software.

Gain time for more productive activities

Handling business checks by hand takes real time away from your team. Each check means several steps:

• Writing the check
• Getting sign-off
• Stuffing and stamping the envelope
• Dropping it at the post box

Your business likely has better things to do with its time.

Get better visibility into your payments

Automation gives you a real-time view of every payment, so you can track spend, spot errors early, and make faster cash flow decisions. It helps your business stay ahead of its spend and gain greater cost control. You can even set flags on certain types of spend and behavior, so it’s easier to spot errors or possible fraud.

Professionalize your business

Partners notice the way you handle and process payments. Many online payment systems make it easy to create and send professional documents, including checks, inexpensively. In our experience, vendors will take you more seriously too.

Avoid human errors

Automated processes save paper and reduce postal costs, and they also increase accuracy. Automation helps prevent the most common errors:

• Duplicate payments: paying the same invoice twice
• Payments for undelivered goods: paying before goods or services arrive
• Late payments: missing due dates and facing penalties

An automated process lets you handle and access invoices from a central location. That reduces confusion and the chance of error.

No IT experts required

You might hesitate to move to automated payments because you worry about your IT skills. If so, think again. Many of today’s payment systems need no IT knowledge and are easy to set up. The new generation of automated systems is also seamless, so vendors keep receiving checks without any setup or intervention.

How to automate your vendor payments

Getting started is simpler than most business owners expect. You can be up and running in a few steps.

1. Connect your accounting software: Link the tool you already use so records stay in sync.
2. Add your vendors: Enter your suppliers and let them share how they want to be paid.
3. Capture and approve invoices: Bring in invoices and approve them in one place.
4. Schedule the payment: Choose the method and timing that fit your cash flow.

Making the move to automated supplier payments

At Melio, we understand small businesses may not have IT experts on hand. Our payment system is both intuitive and seamless, making it a preferred choice for businesses and vendors alike.

We also give you the flexibility to pay vendors in the format they need. You can pay by bank transfer or credit card, even if a vendor only accepts a check. To see how smooth it can be, try it with one of your vendors. Sign up for Melio to get started.

Vendor payment automation FAQs