Benefits of Utilizing AP Automation in the Private Club Industry

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Accounts payable (AP) processes are a vital component of any business but are especially important in the private club industry. When members are expecting high-quality food and beverage, it’s critical to properly manage deliveries and maintain relationships with multiple sellers to create a reliable supply chain. 

Ensuring payments are being made to suppliers in a timely manner and for the correct products is the key to operating a quality club. However, manual AP processes leave a lot to be desired, and managing payment schedules on top of other daily responsibilities can be overwhelming. 

Automating AP processes not only mitigates the risk of human error, but it can also cut costs and create a streamlined workflow for back-of-house operations that organically improve the member experience as well.

What is AP Automation?

Accounts payable processes are complex. The AP department or manager must ensure all products purchased on credit are paid to an authorized user for when previously stipulated or risk damaging their reputation with suppliers or overpaying for a shipment. 

Even a little mistake in AP can be costly for a business, especially for private clubs that are purchasing expensive food and beverage items. For instance, some of the most common AP mistakes are duplicating payments, paying for items never received or wrong PO numbers. All of these setbacks are not only time consuming for management teams to figure out, but they are also costly to the club as a whole and severely disrupt other ordering processes. 

AP automation streamlines and standardizes these activities to ensure everyone is following the same structure and payments are being made on time. The immediate benefits of switching to automation are clear. Enterprises across industries experience 81% lower processing costs and 73% faster cycle times when they use an automated AP platform, according to 2020 Business Insider data.

Automation cuts out many of the convoluted manual processes of AP and allows an invoice to be submitted electronically, captured by the buyer within the platform, approved and sent to the supplier without ever physically passing hands. No more paper, lengthy approval processes or lost checks. 

Even with these overarching benefits, 54% of companies still enter their AP invoices manually, per 2018 research from PayStream Advisors, leaving more room for human error. This could be because niche industries, like private clubs, need more than just cost efficiencies to switch their accounts payable processes.

Enhanced fraud protection

CedarCreek Systems created an AP Automation Module specifically with the private club industry in mind. Along with reducing process times and costs, the system includes 3-way Auto-Matching to ensure data is secure. The 2020 Association for Financial Professionals Payments Fraud and Control Survey Report found that, in 2019, 81% of businesses were targets of payment fraud, including 74% reporting check fraud. 

The core of CedarCreek’s AP Automation model is its proprietary Auto-Matching engine for enhanced security. When documents are uploaded to the system, the Purchase Order, Receiving Events and the Invoice are compared to ensure the correct amount is paid to the correct, authorized supplier. The engine automates the matching process and can accommodate customized rules to configure that system to operate itself unless an exception is detected. 

This optimizes AP processes by allowing normal payments to be securely automated while anomalies are identified for further review. For private clubs, this also simplifies managing relationships with multiple vendors. Everyone in the process can rest assured that payments are being processed correctly and on time.

Streamlined data input and approval flow

Automation is made possible through electronic invoicing, which naturally supports AP processes. Invoices can be sent electronically via an EDI feed, or an OCR image scan can make uploading the necessary information into a payment platform easy. Automating AP with CedarCreek Systems means that 80% or more of invoices become touchless and cycle times are reduced by 25%.

Reducing the time it takes for an invoice to be processed and paid benefits every stakeholder in the relationship. Suppliers receive their payments on time without the need for inquiries, effectively building their confidence that the buyer is trustworthy. Private club managers are assured their books are accurate while mitigating the chances of an invoice becoming lost, meaning they can spend more time monitoring other areas of the business. 

This efficiency has positive effects across the club. Managers, finance departments and other employees have time back in their day to dedicate to other operations. Perhaps most importantly, however, is how effective back-of-house operations affect the experience of valued members. A smooth AP process allows for a stable supply chain, so private clubs are able to provide the level of service and high-quality products members expect. 

Customize workflows for exception reporting and payment

While AP automation standardizes processes, it’s never a one-size-fits-all approach. Different clubs have different needs from their payment processes as well as different relationships from their suppliers. A club configures matching rules to its needs, so the system is fully ready to be fed and complete payments that match the preexisting conditions. For instance, if a club manages relationships with only a few authorized suppliers, they may want to ensure that only invoices with their names are processed by the system, while unrecognized names are flagged to be handled manually.

Of course, when an invoice is flagged that doesn’t mean all operations stop. Managers can choose whether an exception is put on hold, paid with an override, short paid or resolved with an internal team. As the system runs itself, managers can continue to customize workflows as internal processes change or as their club grows, while confident that accounts payable are being completed accurately.

CedarCreek Systems offer the premier AP automation solution for private clubs. The platform and technology are used to connect managers to suppliers to improve efficiency, reduce costs, and overall, provide accountability and security for a club’s hard-earned dollars. 

Schedule a demo today to learn more about deploying this solution in your club and streamlining your AP processes.

Sources:

https://www.jpmorgan.com/content/dam/jpm/commercial-banking/documents/fraud-protection/afp-fraud-survey-2020-report-highlights.pdf

https://www.businessinsider.com/accounts-payable-automation-report

https://paramountworkplace.com/wp-content/uploads/2018/03/2018_PayablesInsight_PWP_3.14.pdf