Payment Automation
A Complete Guide
ScienceSoft applies 16 years of experience in corporate financial software development and deep practical knowledge of the payments domain to help businesses establish effective payment automation.
Payment Automation in a Nutshell
Payment automation helps eliminate manual tasks across all payment-related processes, from document processing and approval to payment execution and reconciliation. Automated payment software can also provide advanced payment analytics to ensure accurate planning of liquidity and working capital.
Payment types that can be automated:
- B2B payments (to suppliers, contractors, etc.)
- Tax payments
- Payroll-related payments
- Employee reimbursements
- Principal and interest payments on the existing liabilities
- Intercompany payments for multi-entity enterprises.
|
|
|
|
|
Key integrations: ERP, accounting software, vendor portal, procurement software, treasury software, HR system, etc. Implementation time: 6–11 months for a custom automated payment system. Development costs: $150,000–$400,000, depending on the solution’s complexity. Annual ROI: 100–400%+. |
|
|
|
Payment document processing
Embrace the capabilities of AI, RPA, and image analysis techs to get up to 20x faster and more accurate capture and validation of data from payment documents. 90%+ of manual processing tasks can be automated.
Payment planning
Employ ML to analyze historical payment data and precisely forecast the due payment amounts. Rely on AI to get intelligent advice on the optimal payment time and method to save up to 3% on payment costs.
Payment execution
Enjoy up to 12x faster invoice-to-pay cycle due to automated enforcement of payment transactions. With timely payments and decrease in DSO, you win high vendor satisfaction and an opportunity to get more favourable prices.
Payment analytics
Get real-time calculation and 100% visibility of the required payment metrics. Benefit from precise, data-driven planning of liquidity and working capital due to the full insight into historical and expected payment transactions.
Automated data extraction from payment documents
- RPA- or ML-powered data capture and extraction from digital payment documents, including:
- Purchase invoices in various formats (XML, PDF, digital images, e-invoices, etc.).
- Digital receipts on business-related employee expenses (travel, transport, telecoms, etc.).
- Automated conversion of paper documents into a pre-defined digital format using optical character recognition (OCR) technology.
- Support for multi-currency and multi-language payment documents.
Automated verification of purchase invoices
- Automated invoice reconciliation against purchase orders, goods/service receipts, supplier contracts.
- User-defined thresholds for invoice matching tolerance.
- Automated validation of invoice data at the line-item level (invoice number, date, price, quantity, etc.).
- Invoice verification against the pre-set tax rules, region-specific e-invoicing compliance requirements.
- Alerts on invoice discrepancies (duplicate invoices, missed, mismatched or inaccurate data, tax variances, etc.) that require a manual check.
Automated payment approval
- Automated routing of valid payment documents for approval.
- Configurable multi-department payment approval hierarchies for various payment categories.
- Real-time multidepartment tracking of payment approval status.
- Scheduled reminders (in-app and email) to payment approvers.
- A full payment approval history.
- Automated routing of approved payments for execution.
Automated payment planning
- Automated calculation of due payment amounts by period, category, payee, business entity, etc.
- Automated payment scheduling.
- User-defined rules for payments prioritization (e.g., based on a due date, payment amount).
- AI-based recommendations on payments to prioritize (based on analysis of early payment discount terms in purchase invoices).
- A customizable payment calendar.
Automated payment execution
- Scheduled and ad hoc payments (including recurring, partial, and consolidated payments) to suppliers, contractors, employees, governmental entities, etc.
- Rule-based assignment of optimal bank accounts and payment methods (e.g., direct debit via ACH, bank transfer, virtual card, check) for domestic and cross-border payment transactions.
- Support for multiple payment currencies, including cryptocurrencies.
- Automated generation of payment orders and their submission to a bank.
- AI-powered validation of a payment receiver’s bank account details.
- Customizable payment templates for recurring payments.
- Notifications on payment dates.
Multi-entity payment automation
- A payment factory (POBO and ROBO/COBO services) enabling automated payment management across multiple intercompany entities.
- Multi-currency cash pooling.
- Automated multilateral netting for intercompany payments.
Payment control
- Real-time payment tracking by status (due, sent, in process, received), period, category, amount, region, business entity, and more.
- Configurable payment control dashboards for various user roles: accounts payable specialists, payroll managers, procurement managers, payment analysts, etc.
- (for payments in crypto) Full traceability of payment transactions in the blockchain ledger.
Automated payment reconciliation
- Automatically matching data on payment transactions with the data provided in daily/weekly/monthly bank statements.
- One-to-one, one-to-many, and one-to-all payment transaction matching based on the pre-defined rules.
- Automatically defining payment discrepancies (e.g., mismatched or inaccurate payment transactions) and marking them to be reconciled manually.
Payment analytics
- Calculating and tracking essential payment metrics: total amounts owed and paid by period, average DPO, A/P turnover ratio, the total amount of won payment discounts due to early invoice submission, and more.
- Automated reports on payment KPIs.
- Payment amount forecasting (by period, category, region, business entity, etc.) based on the analysis of:
- Historical data on payment transactions and company payment behavior trends.
- Forecasted due payments (e.g., procurement-related payments, payroll, taxes).
- AI-powered suggestions on how to optimize payment amounts (e.g., recommendations on optimal payment dates, payment methods, currencies for cross-border payments to maximize cost savings).
Payment data security
- AI-based payment fraud detection.
- E-signing for approved payment documents.
- Compliance with global, region- and industry-specific regulatory standards, including GAAP, SOC1 and SOC2, SOX, AML, GDPR and PSD2 (for the EU), ZATCA (for Saudi Arabia), the Open Banking Standard (for the UK), HIPAA (for the US healthcare), and more.
- Comprehensive audit trail for payment-related activities.
- Configurable data retention and deletion policies.
- Payment data encryption.
- Multi-factor authentication.
- Role-based access control.
|
|
|
|
|
|
|
ScienceSoft’s Senior Business Analyst and Financial and Banking IT Consultant Natallia Babrovich shares her expertise: Although there are niche solutions that can handle particular payment automation tasks (e.g., automated invoice processing software), we usually recommend going for comprehensive payment automation system’s functionality. As long as you strive to get end-to-end payment automation, you need to make sure that manual efforts are eliminated across all payment-related processes, otherwise the payment flow will still be slow and require human involvement. It means that if you don’t have dedicated solutions to automate payment document processing, we design your payment automation software to bridge this gap. |
|
|
|
|
Essential Integrations for an Automated Payment System
Connecting payment software with relevant internal and third-party systems helps create a cohesive automation environment that needs minimal human involvement and improves payment process efficiency. ScienceSoft recommends establishing the following key integrations:
- For faster processing of supplier and contractor invoices.
- To keep suppliers and contractors up to date on the payment status.
For accurate recording of invoice data and payment information in the general ledger and relevant subledgers (an accounts payable ledger, a payroll ledger, a tax ledger).
- For automated invoice reconciliation against purchase orders.
- For automated input of supplier business information, including banking details, when generating payment orders.
For automated purchase invoice matching against goods/service delivery receipts.
For payroll automation.
- For the automated calculation of taxes, principal and interest payments on the existing liabilities.
- For accurate planning of liquidity and working capital.
Banks’ payment processing systems
- For quicker payment processing.
- For real-time tracking of payment progress.
- For faster reconciliation of payments across multiple domestic and international bank accounts.
For comprehensive payment analysis and reporting.
End-to-end automation
To eliminate low-value manual tasks: payment document processing, payment approval, tax calculation, payment order generation, etc.
AI-based prescriptive analytics
To get intelligent recommendations, for example, on the optimal payment priority queue or payment methods for particular transactions to maximize cost savings.
Mobile access
To enable payment tracking and approval on the go.
ML-powered forecasting of payment amounts
To accurately plan cash and liquidity.
Easy-to-use APIs
To integrate payment automation software with the required corporate and external systems and ensure real-time data sync.
Robust security
To reduce the risk of illicit payments, malicious attacks, and sensitive data disclosure.
How Much Does Payment Automation Costs?
The costs and timelines of implementing custom payment automation software vary greatly depending on:
- The number and complexity of a solution’s functional modules, including AI-powered features.
- The number and complexity of integrations.
- The data volume that needs to be migrated from spreadsheets and legacy payment software.
- Availability, scalability, performance, and security requirements.
- The sourcing model (full outsourcing, team augmentation, or all in-house).
|
|
|
|
|
|
|
From ScienceSoft’s experience, a custom payment automation solution of average complexity requires $150,000–$300,000 in investments, while building a complex automated payment system for a large enterprise may cost $400,000+. |
|
|
|
|
|
Up to 12x faster invoice-to-pay cycle due to automation. |
40–400% growth in the payment team’s productivity due to eliminated manual tasks. |
|
97%+ improved payment accuracy due to minimized human involvement. |
1–3% cost savings resulting from AI-powered suggestions on spend optimization opportunities. |
|
|
|
-
- You want smooth and cost-effective integration of the automated payment software and your business-critical systems (ERP, a vendor portal, procurement software, HRMS, a treasury solution, etc.).
- You need a solution that is compliant with region-specific regulations (e.g., to keep up with ZATCA’s e-invoicing requirements in Saudi Arabia).
- You need highly secure software providing advanced data protection capabilities (e.g., intelligent fraud detection, biometric authentication).
- You need a flexible automated system that is easy to evolve with new features as your business grows or new legal compliance requirements arise.
- You’re building a blockchain payment system and want to implement smart-contract-based payment automation.
Payment automation consulting
- Analysis of payment automation needs.
- Assessment of the existing payment processes, tools, and their integration points.
- Suggesting optimal features, architecture, and tech stack for a payment automation system.
- Preparing a plan of integrations with the required internal and third-party systems.
- Consulting on security and compliance.
- Implementation cost & time estimates, expected ROI calculation.
Implementation of payment automation
- Payment automation needs analysis.
- Automated payment software conceptualization and architecture design.
- Custom payment automation software development or modernization of your existing payment solution.
- Integrating the solution with the required internal and third-party systems.
- Quality assurance.
- User training.
- Continuous support and evolution (if required).
Our Customers Say
We cooperated with ScienceSoft on the evolution of our Azure-based product for accounts payable management. ScienceSoft was to cover end-to-end development of an intelligent paperless invoice processing module for the product. ScienceSoft’s developers selected and implemented techs that ensured the system’s availability and fault-tolerance in the future. We were particularly pleased with neat alignment of the developed module with our requirements.
The new software module performs stably even under heavy load, which helps provide high quality user experience for our customers. ScienceSoft proved to be a reliable tech partner, and we can recommend other businesses to consider ScienceSoft as a software development vendor.
Wadih Pazos, Chief Operating Officer, Paramount WorkPlace
About ScienceSoft
ScienceSoft is a global IT consulting and software development company headquartered in McKinney, Texas. Since 2007, we help businesses design and implement effective payment automation software. Being ISO 9001- and ISO 27001-certified, we apply a mature quality management system and guarantee that cooperation with us does not pose any risks to our customers’ data security. Explore ScienceSoft’s financial software development offering to learn more about our approach.