Managing cost and complexity in the manufacturing sector is top of mind for manufacturing companies. Supply chain disruptions and labor shortages are pushing companies to operate more efficiently, which means that finance departments need to focus on carefully managing cash flows and supplier relationships. But at the same time, Finance leaders are being asked to think more strategically and align their teams around the company’s overall business objectives.
Leveraging automation to address manufacturing industry challenges
Manufacturers looking for help in addressing challenges would do well to consider a cloud-based accounts payable (AP) automation solution. AP automation delivers transformational benefits that can help organizations not only survive but thrive in today’s business environment.
Here at BILL, we have seen firsthand how our manufacturing customers have leveraged AP automation to drive effective finance-driven strategies that deliver on business outcomes.
Inspired by our customers’ experiences, we would like to share five powerful benefits that manufacturers can unlock with AP automation.
1. Drive efficiency with digital transformation
While many manufacturing companies (rightly) focus on how Industry 4.0 capabilities like artificial intelligence (AI) and Big Data can transform the shop floor, there remains untapped potential for digital transformation in the back office. AP automation can help revamp the manufacturing organization, introducing efficiencies that transform the company operationally.
AP automation solutions that utilize (AI) and machine learning to assist with data entry not only make tasks easier, they reduce human error. These technologies also get smarter over time as they learn the patterns and preferences of a business.
With AP automation, payment approvals become a steady workflow, rather than a bottleneck. No more chasing signatures from busy people—approvers can now sign off on invoices anytime and anywhere. Communication among the internal stakeholders is also simplified and much easier to document.
Aunt Flow manufactures a range of period products, from tampons and pads to dispensers and signage. The company adopted BILL to help their finance team move from manual, paper-based process to a digital, automated solution. As a relatively new company with a small team, AP automation with BILL played a vital role in streamlining their finances.
"When you’re dealing with paper invoices, it’s easy for things to get lost in the shuffle, and it requires a lot more hours and face-to-face to figure out payments. Centralizing and digitizing all payments in one place with BILL transforms accounts payable from a pain point to a seamless process."
2. Improve supplier relationships
Maintaining mutually beneficial relationships with suppliers is key to the success of manufacturing companies. For finance departments, that means keeping the cash flowing with as few hiccups as possible, because in these times of supply chain disruption, the last thing you need is a payment problem.
Automated AP can help you build supplier relationships in several important ways:
- Paying international suppliers in their preferred currency. Whether suppliers want to pay in US dollars or euros or a local currency, you need the ability to seamlessly make the choice with little or no hassle. With the right digital payments platform, international payments should be just as easy as domestic payments.
- Protect vendor payment information. Allowing suppliers to set up their own payment accounts means they can avoid exposing sensitive bank information to your team.
- Enable vendors to self-manage and track payments. Self-serve through a platform like BILL is safer for the suppliers and reduces risk for your company. Once onboarded, suppliers can receive payments and track current and past payments digitally through the platform.
- Offer flexible payment options. Paying suppliers by any method they prefer, whether it be ACH payment, wire, virtual card, or check—without exposing banking information— gives you an advantage. Two-factor authentication offers strengthened security.
Spikeball® is an American sports equipment manufacturing company that uses vendors from all over the world to produce their products. As a rapidly growing company with a relatively lean finance staff, they needed an easy way to pay vendors in multiple currencies, quickly. Using BILL’s international payments, Spikeball has built strong relationships with their international suppliers.
“BILL enables us to pay our overseas vendors in local currencies or US dollars. We used to have to go to our bank to send wires. Each transfer cost $15 and would take at least 15 minutes. That really adds up when you have hundreds of bills to pay each month! With BILL, it’s a 1-click operation.”
3. Take control over purchase-to-pay workflows
Purchase order matching is an automated process that checks for discrepancies between purchase orders and their associated invoices, before invoices are approved and paid. With two-way matching, the purchase order and invoice are compared. If they don’t align, the invoice is held without being paid until the discrepancies can be addressed.
Three-way matching* takes it a step further, comparing the purchase order, the invoice, and the item receipt to ensure all three are aligned.
Automating purchase order matching has several benefits. The first is somewhat obvious: reducing payment errors. Catching discrepancies before an invoice is paid will help you avoid overpayments, duplicate payments, and unapproved payments.
The extra level of scrutiny provided by automated purchase order matching will also protect your business against fraud. Sometimes “mistakes” are intentional, and using an automated system will help you execute on your company’s internal control policies and identify fraudulent patterns and bad actors.
*Capabilities vary by accounting software. Please contact BILL to learn more.
aboutGOLF produces golf simulation software and hardware for entertainment venues and in-home use. The company’s golf simulators require a large number of parts from multiple vendors, which meant hundreds of invoices that needed to be checked carefully against purchase orders.
Automated three-way matching from BILL, which is integrated with their NetSuite ERP system, has made it quick and easy for them to pay bills with confidence.
“The new automated three-way matching capability from BILL has reduced our time spent on AP by up to 75%.”
4. Manage AP from anywhere
While post-pandemic policies vary from company to company, it is clear that remote work is here to stay. The flip side is that as pandemic restrictions end, business travel is back with a vengeance. Either way you look at it, the ability to manage payments remotely and on the go is a crucial capability.
Mobile AP is especially important for small- and medium-sized businesses where individuals often play multiple roles, wearing operations, sales, and finance hats all at the same time.
Traditionally, accounting has been a location-dependent function, with valuable documents, invoices, and check stock kept securely in one physical location. Now, digital payments and mobile technology have evolved enough to replace this antiquated system.
With automated AP, finance processes need not be limited to when people are in the office. With a mobile platform like BILL, companies can review documents, collaborate with other reviewers, and authorize payments from any mobile device with an internet connection.
Clif Family Winery
Clif Family Winery is an agricultural business where staff and management spend a lot of time outside, away from the office. And as a small business with a limited number of people who can approve invoice payments and keep the finances flowing, the company needed an AP solution with maximum automation and flexibility.
The company uses BILL to review, approve, and pay bills from a variety of different devices at any time of the day, freeing up the team to do work wherever they need to be.
“With BILL, I can be in the field, the cellar, or the winery and approve a bill. It’s all so accessible from phone, tablet, or laptop.”
5. Free up time to focus on your business
While digital transformation is vital, in many ways it is a means to an end. The biggest benefit of AP automation is that it frees up time for other things. Once a finance department adopts a platform like BILL, accounts payable often goes from being an entire job description to a single task. For manufacturing companies, that means:
More time for strategy. Strategic thinking has never been more important in the manufacturing sector, and finance teams need time to proactively prepare for changes in the competitive, economic, regulatory, and legal landscapes.
More time for customers. The most successful companies put the customer at the center of their efforts, taking time to listen to the voice of the customer and letting empathy drive innovation in the finance team and beyond.
More time for the mission. Manufacturing companies are mission driven—from wearable medical robotics company Myomo to Blinkcns with their pioneering blink reflex technology and Bear Robotics, revolutionizing the service industry with their robotic servers. Freeing up finance teams to focus on the greater purpose will make for a stronger culture and unlock innovation to further the mission.
Repurpose is a mission-driven company that manufactures compostable, sustainable home products that are alternatives to single-use plastics. The company adopted BILL automation to improve efficiency in their finances, but it also supported their mission of sustainability. Reducing paper and enabling carbon-saving remote work made this green manufacturer even greener.
“Overall, a huge benefit of BILL is that I have much more time for big picture planning—team planning, budgeting, looking for areas of cost savings, and just preparing to scale. The system has helped me grow as a professional, and it has helped Repurpose grow as well.”