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What does the Digitization of Payment Orders mean for companies in 2023?

Author: Alice Anghelea

Optimizing the payment of bills, salaries, and obligations to the state budget

An old problem that was looking for a solution

In recent years, the digitization and automation of financial activities have been hot initiatives on the agenda of finance departments. Of all this, the optimization of third-party payments remained untouched.

When we pay suppliers, employees, and obligations to the state budget, all we know about paying are the classic payment orders or bank transfers. By initiating payment by payment from Internet banking or by importing different payment files to multiple payees, third-party payments have eroded the efficiency of cashiers and payers for over 20 years. It creates a commotion when payment deadlines approach, consumes time and focus with worthless activities, and perhaps most worryingly, exposes confidential information – such as payroll – outside the applications meant to protect it.

"What do we pay, from which banks do we pay and how do we pay?" – have been constant questions in Accounts Payable departments for the last few decades, during which bank payment technology has stagnated in the absence of innovation, leaving the automation of third-party payments far behind other financial activities.

When RPA is not the solution

Some companies, satisfied with the results obtained with RPA (Robotic Process Automation) solutions in automating redundant activities in the financial area, are looking to solve the payment problem similarly. Robots, however, cannot create and authorize payment orders, one of the reasons being security risks, malfunctions, and violation of the banks' terms and conditions.

...Open Banking is the only solution - because it digitizes and secures payments the best
SmartPay for suppliers, salaries, or state-budget obligations.
SmartPay bulk payments

But the wait is over. Today, thanks to the opening of banks to third-party technology providers that digitize payments in addition to other banking services (opening regulated at the European level and already known as Open Banking in Romania as well), companies can start to abandon the manual operation of payment files and the variety of formats they must follow.

Thus, the automation circle specific to Accounts Payable activities is closed by digitizing the payment of invoices, salaries, and obligations to the state budget, along with other payments particular to each company's field of activity.

Easier payments to suppliers

Paying suppliers is one of the most important actions to leave to chance. Done correctly and on time it ensures a good relationship with your suppliers and saves you from the risk of fraud. And for that, the payment experience must not be a chore; more precisely, it must be optimally digitized.

Without "disturbing" the current flow of financial activity in your company, enabling the initiation of payment orders right in your financial application helps you quickly digitize payments to suppliers.

Here are the benefits:

1. 100% payment autonomy from multi-cash files

The only role payment files have had until now was to help you prepare multiple payments to your suppliers in the formats your banks require.

With digitization, files disappear, requiring them to follow the banks' format. Thus, you eliminate today's complexity in the payment process given by file exports and import bank requirements and simplify any payment to one or more beneficiaries.

2. Short, unfragmented, digitized payment flow: from the approval of invoices in ERP - to the authorization of payments in the bank - and back to ERP

Once the invoices proposed for payment and the bank account you want to pay are approved, you initiate and authorize the multiple payment order from your application.

From ERP to the bank, and back to ERP, you go through an easy payment flow, digitized at every step, where technology helps you.

In addition, you are always automatically informed about the status of payments regardless of the day and time you authorize.

How to make bulk payments throw open banking.
SmartPay bulk payments

3. Save time and energy when paying bills

The care and effort of manual payment processing takes a lot of time and energy and leads to low productivity.

By digitizing payments, they become accessible, and efficiency increases exponentially with the volume of payments you must make.

4. Payment details remain intact and secure

Exportul ordinelor de plată în fișiere - medii externe aplicațiilor informatice - și manipularea lor dintr-un sistem în altul sunt mereu o sursă de erori și breșe de securitate.

The payment initiation service ensures the intact transmission of their details to the bank through a secure API channel, audited and validated by banks according to the National Bank of Romania regulations.

Paying the salaries of hundreds and thousands of employees operated with maximum efficiency and security.

For the first time in a long time, digitization is also knocking on the door of salary payments.

Only those who work in payroll departments or companies that offer outsourcing services know the pressure of the salary calculation processing calendar at the end of each month.

The greater the number of employees for whom payroll is processed and the more corrections to payroll data, the greater the pressure. Unlike other administrative processes, payroll is the last to enjoy automation solutions locally and outside of salary calculation, which is done 100% automatically with the help of specialized applications. The operations preceding it still involve the manual exploitation of salary data files and the most anticipated activity of the month: the payment of salaries to the employees' accounts.

Paying salaries still means exporting files, extracting confidential details outside payroll applications, and sending them via email or other means to the person with Internet banking access rights for manual import and authorization.

Thus, payroll is exposed in multiple environments, security decreases, and the risk of file or data corruption emerges, putting pressure on the payroll team.

The technology that Open Banking has already made possible today helps to root out the shortcomings in paying salaries.

Facilitating payments from payroll applications is fundamental in streamlining the payroll process, saving time, relieving payroll specialists at the busiest and most pressing time of the month, and maximizing payment security.

You validate the salary calculation in the payroll application and are redirected to the bank where you authorize the salaries. So simple.

Fees, contributions, and taxes are paid without stress

When we talk about taxes, contributions, and taxes, two essential aspects do not let companies sleep peacefully:

  • ensuring a correct calculation of them for the company and employees

  • the guarantee that the payments initiated reach the right accounts at the State Treasury and are correctly associated with the Unique Identification Code of the paying company, respectively, the Personal Numeric Code of each employee.

By enabling the payment from the company's bank account directly to the state accounts in the financial application, the risk of error when initiating payments to the state budget drops to zero. You only maintain your payment details in your financial app, and they are sent to your bank via your payment service when you decide to pay.

By eliminating manual intervention in the payment operation, you eliminate the risk of misallocating amounts that would otherwise lead to lost time and stress for you, your company, or your clients if you are a financial accounting service provider.

Initiation of payments through authorized third-party payment services to treasury accounts is guaranteed to be carried out correctly and reconciled quickly in the authorities' systems, being easily recognized at the payer level.

Payment security always comes first.

Irrespective of the beneficiaries of the payments, transaction security is a prominent feature of payment order digitization solutions and the primary concern of all participants in the evolution of bank payments: banks, fintech technology providers, and the regulatory body – NBR.

Based on the banks' security infrastructure and using the same encryption and security protocols as online banking systems, authorized payment services are provided in a regulated framework that has as its primary objective the safety of payers and the protection of their data. The initiation of any payment to one or more payees is within the user's sole control.

Conclusion: Digitization of third-party payments is a necessary optimization

Third-party payments are too important to continue operating on old technologies and lag behind financial accounting activities whose automation and digitization have seen real progress in recent years.

The technology, available today only through authorized fintech providers, is premiering several benefits for companies looking to move away from manual, file-based payments and instead increase efficiency, productivity, and well-being through the nature of the activities their teams do. Perform them day by day.

Last but not least, companies concerned about the security of their financial transactions find the highest level of protection in payment solutions developed by fintechs authorized by the NBR.

Want to simplify third-party payment for yourself or your customers?


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