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Benefits of an Automated Payment System

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Last editedMar 20232 min read

Collecting and making payments to and from clients and customers can be time-consuming and costly, especially for startups and small businesses. Payment automation can change this by providing businesses with a way to boost efficiencies. An automated payment system can help companies streamline processes, eliminate human error, cut costs, and speed up invoice processing.

In this post, we’ll examine the many benefits of using an automated payment system for all your payment transactions.

What is an automated payment system?

An automated payment system allows businesses to make bill payments directly via an electronic payment system. Payment automation can be used for EFT (electronic funds transfer), Direct Debit, virtual card, and wire payments, enabling businesses to pay – and get paid – faster.

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Main benefits of using an automated payment system

Faster cycle times: Automation makes processes more efficient and provides faster invoice processing, offering companies the opportunity to take advantage of early payment discounts. With automatic payments you never need to worry about customers or clients paying you on time. You’ll know exactly when payments will be processed, which will help keep cash flowing and allow you to plan ahead.

Cheaper transactions: Automated payments are cost-effective when compared to paper transactions. The cost of processing and paying invoices traditionally is higher than paying them electronically.

Fraud prevention: Automatic billing software offers a high level of payment security and encrypts sensitive financial data, making it a safe and secure payment option. By switching to payment automation, it’s easier to detect and prevent fraudulent activities.

Fewer errors: When errors occur in the accounts payable process, it eats up valuable time and can erode supplier relationships. Duplicate payments are also a problem. Automation reduces the percentage of duplicates and overpayments.

Better supplier relationships: Accounts payable traditionally spends a lot of time answering supplier queries around their invoices and payment status. By automating the process, you can provide suppliers with real-time transparency when it comes to their transactions via a portal. This reduces the workload and improves supplier relations. This is especially true if you set up automated Direct Debit. Once a payment schedule is set up, clients will have the assurance that their bills will be paid on time, without any extra effort.

Better for the environment: Automatic payments offer small businesses a way to eliminate having to send paper invoices by mail and paper documentation on the client side, which is considerably more beneficial to your business’s carbon footprint.

Types of automated payments

Automatic payments include pre-authorised Direct Debits, regular debt repayments (for mortgages and credit cards) and payments for recurring transactions.

How to set up an automated payment system

To start setting up automated payments for your business, you’ll need to do your homework and compare payment solutions providers to identify the best one for you. You’ll also need to let your clients and customers know that this service is available to them, and possibly offer incentives for them to switch to the new system.

There are clear advantages to using software and online tools to automate payments. Despite this, many accounts payable departments are still using outdated manual data entry and invoice processing to handle payments. This could be a costly mistake. With an automated payment system, it’s simple and cost-effective to set up automated payments that are safe and secure, enabling your firm to collect payments quickly and efficiently with little admin or effort.  

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GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.

Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.

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