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Why your AP and Payments Processes Should Make Use of a Hybrid Cloud Approach

6 minutes read
Published on 20-02-2024

In today's dynamic business landscape, the process of paying suppliers remains a manual and paper-intensive task for many enterprises. This traditional approach is plagued by inflated costs, complexities in managing multiple vendors and banking accounts, compliance challenges, and elevated fraud risks. However, amidst these challenges lies an opportunity for transformation.
Payments professionals surveyed by the Institute of Finance and Management (IOFM) spend 84 percent of their time bogged down by an endless list of manual tasks such as inputing invoice information, matching invoices with purchase orders and shipping documents and searching for lost or misplaced invoices to name just a few.
Cloud-based solutions offer a promising avenue to streamline invoice processing and payment processes. Cloud solutions reduce complexities and drive down costs. Moreover, when  integrated with enterprise resource planning (ERP) systems, cloud solutions unlock unprecedented value, enabling easy access to information, centralized  data, and secure, standardized global workflows.

 

Cloud-based Invoice to Pay Solutions Driving Innovation

 

The adoption of cloud-based invoice to pay solutions is on the rise, offering scalability, standardization, and enhanced security. Businesses can now deploy these solutions swiftly, eliminating the need for extensive IT infrastructure and maintenance. Moreover, the cloud empowers remote access, enabling stakeholders to manage payments anytime, anywhere.


Always up-to-date cloud solutions are able to quickly detect and prevent potential payment fraud, which was experienced by almost two-thirds of businesses (65%) in 2023 according to a recent survey by the Association for Finance Professionals. Cloud solutions can also help organizations reduce the Days Payables Outstanding (DPO). By automating the invoice to pay process quickly with a cloud solution, an average F100 company can save more than $25 million cash for every day of DPO. 

 

Hybrid AP and Payment Clouds - Combining the Best of Both Worlds

 

Hybrid AP and Payment clouds merge the strengths of on-premise and cloud-based systems, offering a comprehensive solution for finance professionals.

The concept involves establishing a global invoice processing and payments hub tightly linked to its ERP system. Non-ERP users can access this solution via the cloud, ensuring seamless integration without complex interfaces. It combines secure cloud-based workflows and manual payment capabilities with robust ERP functions. This setup guarantees global visibility of payments, activities, and statuses. By leveraging ERP integration and cloud capabilities, businesses can achieve operational excellence while mitigating risks.

 

Benefits of a Hybrid Payment Cloud

 

A hybrid invoice-to-pay solution  moves vendor invoice and supplier payment processing closer to becoming a “touchless” function.

  • Increased Security and Control: Businesses face a myriad of security threats, including viruses, server attacks, ransomware, phishing, and malware. A cloud solution helps mitigate these risks by enforcing strict access controls, strong encryption, and detailed auditing. It offers multi-factor authentication, automated fraud detection, and continuous monitoring for suspicious activities. Additionally, it eliminates the need for locally installed electronic banking workstations, enhancing visibility, and simplifying maintenance. 
  • Greater Efficiency: Centralization simplifies invoice and payment processes, managing data flow between vendors, buyers and banks, ensuring that data is always up to date  to ensure timely and secure transactions. 
  • Lower Costs: A hybrid cloud solution simplifies operations by reducing the time and effort required to implement and maintain solutions. It also reduces the overall time required to process and pay an invoice, which prevents late fees and enables buyers to take advantage of available discounts. 
  • Enhanced Flexibility: Flexible workflows aligned with corporate policies, enhancing analytics and security while reducing fraud risks through segregation of duties. It provides benefits akin to centralized visibility of data and control event for organizations decentralized operations. Additionally, cloud solutions offer dynamic scalability to accommodate business growth or changes.
  • Better Working Capital Management: Automatically retrieving bank information and real-time invoice and payment processing information ensures timely and accurate reporting, facilitating quick error resolution, and seamless data transfer for reconciliation.
  • Increased Visibility: Aggregating data in a hybrid cloud solution provides real-time insights into payments, cash positions, and forecasts. Decision-makers can access current, reliable information seamlessly, integrating payment and ERP systems for a comprehensive view of transactions. This allows manual payment entry via the cloud or ERP systems with synchronized data, enabling greater cash transparency and control.
  • Streamlined Payments: Consolidating and automating payment file management from multiple ERPs in a cloud solution, ensures validation, authorization, fraud monitoring, and compliance activities align with corporate policies. Currency, format, and regulatory complexities are standardized across global organizations and bank communications are facilitated via channels like SWIFT or host-to-host. Users customize validation and approval processes based on payment size or corporate policies.

 

Corporations cannot afford the costs, inefficiencies, errors, lack of visibility, and risks associated with fragmented vendor invoice management and payment approaches. Embracing hybrid cloud solutions revolutionizes the entire invoice-to-pay process, offering the perfect blend of flexibility and security. By leveraging cloud technology and ERP integration, businesses can streamline operations, enhance visibility, and drive cost efficiency. With the right approach, organizations can future-proof their payment processes and gain a competitive edge in today's dynamic market landscape.

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