Back-End Finance Automation: Strengthening E-Commerce Businesses

E-commerce retailers are facing many much-talked-about problems. They are continued inflation, the increasing cost of goods, customers’ squeezing disposable income, global supply chain shortages, increased out-of-stocks, more demanding customer expectations, massive outflow of vital frontline and back office staff.

On the positive side, new digital technologies still help e-commerce businesses expand online shopping options, improve forecasting and inventory management with AI-powered analytics, upgrade customer service with RPA customer-service bots, last-mile optimization systems for omnichannel experiences, and increase customers’ buying power at the point-of-sale with services like buy now, pay later.

The above-mentioned points are about the front end of the business. As for the back end, there are modern solutions like AP automation, that can deliver important value and quick ROI by helping e-tailers streamline cumbersome finance workflows, improve controls and security, reduce costs, empower remote employees, and help offset staff shortages.

Automating accounts payable processes provides several advantages: faster, more efficient finance processes and workflows; fewer errors and less manual effort required to correct them; more satisfied and productive staff; reduced full-time equivalent (FTE) requirements and operational costs; increased cash-back rebates from suppliers; happier vendors better positioned to support supply needs; better cash flow management, reduced risk of fraud.

Many ecommerce businesses are still making more than 50% of their supplier payments via check. Their AP staff are wasting valuable time and effort opening paper invoices, capturing and entering data, emailing or calling approvers, printing and mailing checks, and responding to questions from suppliers. Finance teams manage big numbers of supplier invoices. Plus, as supply chain disruptions continue, e-commerce businesses need to do their best to maintain reliable inventory sources. This includes getting key vendors paid on time.

Modern accounts payable solutions can automate the entire invoice-to-pay process by providing a single workflow to capture invoices, automatically sync data in ERP and finance systems, simplify approvals, and send payments however suppliers prefer to receive them, whether that’s check, ACH, virtual card, or even cross-border. These solutions can address much of what an e-commerce business needs including vendor onboarding, invoice capture, coding, approvals, and supplier management — as well as payment authorization, execution, and reconciliation.

Full invoice-to-pay automation captures and codes invoices with far fewer errors than manual data entry and significantly reduces time spent processing invoices. Intuitive tools and centralized reporting provide users with detailed views of days payables outstanding (DPOs), pending or past-due invoices, and other category reports. In addition, specific employees can be granted access to the same level of reporting to gain real-time insights into invoice processing. Eliminating paper-based processes and manual data entry and using e-payments can reduce costs per invoice by up to 430% and provide new revenues delivering a complete ROI while funding other parts of the business.

When it is difficult to hire assistants from the back office, AP automation helps e-commerce businesses grow without increasing the number of staff. AP automation allows finance staff to review and approve invoices or pay suppliers from anywhere, using any device. Similarly, month-end closing and AP audit data can be accessed remotely, further minimizing the need for staff to be in an office or store. Improving the ability to pay on time builds better relationships, adds leverage to negotiate discounts, and minimizes the chance of additional supply chain issues.