Secure Financial Futures: A Guide on How to Future-Proof Your Payables

Growing businesses need to consider whether their current finance tech stacks are sufficient for the processes they have in place today and for their future’s growing challenges.

Most early-stage companies start with accounting software designed for SMEs due to their ease of integration, intuitive design, and features. However, scaling companies can often face bottlenecks and disruption due to their changing needs and the limitations of these solutions. For example, this may include an increasing volume of transactions, international requirements, and consolidating group accounts.

Switching to heavy-weight ERP software can cause significant business disruption due to expensive and time-consuming implementations and the need to train staff on new systems.

Organizations can extend the time they use their initial accounting software by incorporating third-party payables software that integrates directly with current core platforms. This allows finance teams to retain a solution that can meet their needs, irrespective of the volumes of invoices, and provide them with more flexibility around the best time to transition to an ERP system. 

The Limitations of SME Accounting Software

Over the last decade, there has been a revolution in cloud-based accounting software for the SME market. Vendors such as Xero, QuickBooks, and Sage offer rich automation-powered features and are sold at a competitive price, so even the smallest businesses can benefit.

Previously, leading accounting software was unaffordable for smaller companies and would require inconvenient workstation updates.

Cloud-based SME accounting software has many efficiencies, including reconciliations powered by live-bank feeds, rule settings for recurring transactions, and automated fixed asset registers.

However, these tools are not without limitations. Many do not incorporate consolidated accounts and cannot cope with high volumes of payables. There are manual workarounds to these problems (i.e., merging data onto spreadsheets from downloads), but using a band-aid approach to fix them only creates further challenges down the line.

Stand-Alone Directly Integrated Payables Tools

Using directly integrated payables tools overcomes the limitations of accounting software providers.

Although accounting vendors have payables solutions, they tend to become clunky and cumbersome to use once companies deal with more than 100 invoices per month.

Directly integrated payables software, such as Tipalti, allow companies to stage their transition to a more robust ERP system and maintain the associated processes for when they eventually make the switch. Leading payables automation tools are agnostic to ERP vendors, seamlessly integrating with all leading players on the market. 

Payables vendors cover the full spectrum of payables activities, including:

  • Supplier onboarding
  • PO management
  • Invoicing
  • Data capture
  • Payments
  • Reconciliations

Cumulatively these activities take up significant finance staff resources, and efficiency gains from specialist payable software will help generate accurate and close to real-time data.

Powerful Automation Features

Stand-alone payables tools have powerful automation capabilities that minimize data entry, eliminate the need to duplicate data, and send email prompts to get users to confirm actions and approvals.

Integrating with accounting platforms enables data to be pulled out automatically for payments, reducing the risk of error, and with confirmed bank transactions being pushed back into the system for reconciliation—saving significant time at month-end. These workflows will remain the same, irrespective of which accounting software payables are incorporated.

Additionally, payables software enhances relationships with suppliers and saves additional admin time by supplier portals providing real-time visibility on the status of invoices and payments.

Fit for Modern Ways of Working

Modern working methods require suppliers to be paid based on their activity rather than on a standard invoicing basis. The creative and gig economies are making the payment patterns of suppliers unpredictable due to their activity being variable and on an international basis. 

Platform businesses are also servicing more customers than before, which creates further issues around scaling due to their volume of suppliers. Judgment is also required in picking the cheapest international payment methods.

The right payable tools can overcome these issues by providing richer features than standard accounting software, including global payments, fraud detection, and self-billing invoices.

Boost Efficiencies and Minimize Disruptions

Incorporating a separate payables automation tool will allow businesses to benefit from future-proofing the payable function now while being able to stage the transition to a more robust ERP software in due course.

This tiered approach will make these switches easier and help manage risks associated with moving onto new software tools.

Take Control of Your Payables Today

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