Turn Accounts Payable into Your Newest Revenue Generator
- Outdated processes in A/P waste time and money.
- Digitize your A/P to turn a cost center into a revenue generator.
If there’s one area of the dealership that seems especially resistant to change and improvement, it’s the business office. More than any other department, this is where tedious processes curb employee productivity, human error leads to costly mistakes, and out-of-control paper storage threatens to overwhelm the whole operation.
The thing is, locating new profit centers within the dealership usually requires dealers to think outside the box. It might feel counterintuitive, but what if your business office is hiding your newest revenue generator in plain sight – just waiting for the right improvements to unlock it?
Consider your accounts payable (A/P) process. On a typical day, A/P feels like a cost center (and not just because money’s literally going out the door). There’s the money spent on printing and postage, the time spent on monthly batch check runs, and so on. Incredibly, the average cost to the dealership per check ranges from $4 to as high as $20,1 and every day spent waiting on those checks to clear places a little more strain on the business.
Throw in the headaches caused when a vendor isn’t paid on time, disrupting one or more of your services/solutions, and the potential costs originating from A/P are huge.
Streamline Your Accounts Payable
The main problem here is inefficiency. To put it bluntly, outdated paper processes waste both time and money, and are less secure than digital alternatives.
In fact, your A/P stands to benefit hugely from digitizing as much of the process as possible. Why? Because digitizing these steps speeds up your ability to do everything, greatly reduces the chances of human error, and increases security (such as making it exceptionally difficult to commit check fraud).
Let’s break down what an A/P solution that really works should be able to deliver for you:
- Generate Revenue. As I said at the beginning, there’s incomparable value in turning a cost center into a revenue generator. Your A/P solution should allow you to pay vendors quickly through options like single-use virtual card payments and collect rebates from those electronic transactions.
- Boost Efficiency. Simplify your A/P by sending payments electronically on the day they are due instead of spending hours on batch check runs a week or two before and stuffing envelopes.
- Save Money. Reduce your expenses in A/P by eliminating the cost of printing and mailing your vendors checks.
- Maintain Security. Make secure online payments, manage user access, reduce the risk of check fraud, and have an electronic audit trail.
There are also intangible benefits to implementing this kind of solution, like improving relationships with the vendors you rely on. Everyone prefers working with someone who’s reliable and pays their bills on time, and your experience with your vendor partners is likely to reflect that.
Your vendor partners themselves would also benefit more directly from such a solution, including receiving detailed remittance data for their own audit trails and improving their cash flow thanks to the immediacy of digital payments.
In short, digitizing and streamlining your A/P is a win for all involved.
The typical dealership business office can be a nightmare of costly inefficiency, but it doesn’t have to be. Your A/P is one area where you can decide to make a change for the better right now and turn a cost center into a revenue generator.
1 The Wall Street Journal