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How to Balance Automation and Control in Payments

17th Oct 2023
Brought to you by
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Nook is a powerful payments platform that streamlines the Accounts Payable process, bringing...
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For growing businesses, the cost of payments can quickly add up, with growing numbers of invoices adding hours of work, as well as the potential for risk and mistakes. For businesses working with manual payments processes, this can quickly get out of hand. 

Automation and Control
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The market for payment tools is expanding however, offering accountants and their clients the chance to effectively automate large swatches of the payment process. But handing over full control to an automated system isn't a realistic option for businesses – owners may rightly fear losing control, leading to increased risk of fraudulent transactions or erroneous payments. 

That’s why, despite the allure of payment automation and streamlining, accountants need to take a leading role in making sure these processes are fit for purpose.

The Argument for Automation

Payments are complex and detailed. The numerous steps, approvals, and data points for validation (such as identifying the payee, the amount, the timing, and the purpose) create a mounting pile of work for internal and outsourced finance teams. That’s why centralising payment records, processing, approvals, and payments can offer substantial benefits:

  • Efficiency: The manual management of every step is not only inefficient but also prone to human error and delays on month-end reconciliations.
  • Visibility: A disparate system covering cloud accounting, email approvals, and manual reconciliation can restrict a clear view of the accounts payable process.
  • Risk Control: When approvals and supplier details are managed outside a central system, the risk of errors or fraudulent activity increases, particularly if individuals are accorded excessive control over crucial steps.
  • Scalability: Establishing a unified invoicing and payment process allows for continuous improvement and adaptation as the business expands, enhancing efficiency and performance.

Nonetheless, automation without adequate controls can be just as risky. The human element, especially from those with the context and insight to make key decisions, remains key. The challenge for accountants lies in developing processes that streamline non-value-add aspects of the workflow, while ensuring critical checkpoints are well-managed.

What Does Responsible Automation Look Like?

Effective automation is a strategic choice. It requires identifying and automating non-value-add tasks where there is the most potential for efficiency gains, such as:

  • Invoice data entry
  • Document digitisation
  • Approval escalations
  • Payment run creation and payment routing
  • Bank reconciliation. 

While these tasks can be automated, critical areas still require human intervention:

  • Approvals should be reviewed by an authoritative party.
  • Payment runs ought to be reviewed by senior stakeholders.
  • The final authorization of the payment run should be executed by the responsible party in the business for enhanced accountability and security.

Enhancing Control with Technology

Automation, when implemented correctly, can also augment security beyond manual capabilities. 

For businesses working with manual payments via bank accounts, managing payee details can be time-consuming and fraught with errors. A 'confirmation of payee' feature, common in personal banking, can provide assurance that payments are directed to the correct individual or entity – an essential in businesses managing multiple suppliers with frequently changing details. 

Nook’s payment platform has integrated ‘confirmation of payee’ at scale, enabling accountants to check that bank details correspond with the scheduled payee's information for every payment. 
Any alterations to payment details are flagged for review at the next oversight level, allowing managers to track and approve any changes in bank details.

The Power of a Human in Control

Accountants play a pivotal role in advising clients on striking the right balance between automation and control, which may change and evolve with the business over time. 

For example, in the early stages of a business, it might be feasible to manually review every payment. However, as the scale increases, clients may need to distribute reviews among various team members or establish rules for specific payment volumes. 

This evolution underscores the role of accountants in guiding businesses through the changing landscape of payment management, ensuring that the blend of automation and human control evolves in tandem with the business’s growth and complexity.

Nook’s end-to-end payment solution provides in-depth visibility, automation and control at every stage of the payments journey, including Xero integration, batch payment review, confirmation of payee and multi-level approvals, ready to evolve with your clients as they grow in size and operational complexity.

Find out more about how Nook can help your clients automate their accounts payable, securely and safely.

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