Accounts payable API: How to offer error-free invoice payments

Modulr By Modulr on 27 October 2023   •   15 mins read
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Your customers love using your ERP or accounting software to calculate their accounts payables. But when it comes to making their payments, they have to leave your platform. You’ve thought about solving this accounts payable problem with an API because:

  • You want a stickier product by offering payments directly on your platform while also helping your customers reduce errors that occur from manually keying, submitting and reconciling transactions.

  • Your customers want to reduce the time it takes them to complete payments, either with faster payment times, payment scheduling, or both.

  • You’re looking for an additional revenue stream to complement your existing product and want to offer your customers payment capabilities at an additional cost.

An accounts payable API can help you deliver these goals and more for your platform. To help you understand how this technology works and what you can do with it, we sat down with our payments expert, Joe Boot. With his insights, we cover:

Are you ready to add real-time payment capabilities for your customers and their accounts payable needs? Talk to us now to see how we can help.

How to embed AP payments in your software with Modulr’s API

With Modulr, companies can enable their customers to pay out their accounts payable easily and error free through software, instead of manually via bank accounts. This means you can offer customers a unified experience, create a one-stop-shop type of product, and scale your business with an additional revenue stream.

We know that you allow your customers to calculate their payments directly through your ERP or accounting software. But to then actually make those payments, your customers need to log off your platform and on to their banking portal – a process that is oftentimes clunky, slow and manual. This crucial step of the AP process is risk-prone and time-consuming, creating frustration for your customers and their vendors and suppliers.

These issues drove us to create an API made for software companies like yours that want to grow both their customer base and product offering and serve their customers better.

Here’s how Modulr’s API lets you embed AP payments in your software so customers can not only calculate payments using your platform, but make them, too.

1. Issue a payment account for you and each one of your customers

As a licenced electronic money institution (EMI) in both the UK and EU, Modulr can create payment accounts on your or your customers’ behalf in GBP or in EUR. Each account comes with an account number and sort code or IBAN, which you or your customers can use to fund and make payments from – all embedded in your software.

You’ll be able to create and manage your customers’ accounts via API. For example, if you need to close an account for a specific end-customer, you can do so through a single API call. Our systems run 24/7 and 365 days of the year, letting you create, block, unblock or close an account, day or night.

Are you technically inclined and want to take a deeper look at our API? Read more about our account creation and management in our API reference docs.

2. Enable outbound payments on your accounts through fast payment schemes

Once you set up your customers’ accounts (and depending on the accounts’ currency, GBP or EUR), your customers can make outbound payments via Faster Payments or SEPA Instant Credit via your software.

With our connection to these fast payment schemes, we can help settle payments for you within 90 seconds. And, since our payment ecosystem is always on, your customers can make payments on any day of the week at any hour of day.

3. Customers fund their account and schedule payments directly from your platform

Your customer can fund their account via the payment method they prefer, such as bank transfer or Open Banking. As soon as the funds settle into the account, we notify you with a webhook through our API. You can use this notification to update your customer and reassure them their funds have settled into their account.

After funding their account, your customers can schedule their AP payments without leaving your software or website. With Modulr, your customers can set up AP payments for immediate release (e.g., as soon as the account is funded) or programme payments for a later date – all from your platform. Whatever payment timing needs your customers have, you can meet them with our embedded AP payments solutions.

You can also choose to offer customers our Confirmation of Payee service (more on this later) on any GBP accounts-payable transactions so they can verify their recipients' account details before sending payments.

4. You send the AP payment

When their scheduled date arrives, Modulr submits the payment instantly.

Once we receive the payment request, we’ll check to ensure your customer’s account has sufficient balance. If they do, the transaction goes through the payment scheme of their choice according to the scheduled date.

Alternatively, we can also provide your customers with greater control with permission settings, which allows them to hold the payment for approval. Though more manual, this is an ideal solution for when heads of finance want to have the last word on their AP payments. Here, your customer just logs into our portal to review and approve the payment. Once done, you submit the payment through the chosen scheme.  

5. Receive notification of payment events

As soon as the payment settles through the scheme, you’ll receive confirmation through our API. This webhook notification will allow you to update your system so customers know the funds are on their way to the beneficiary.

Your customer can also check the payment status directly from your software, giving them full visibility on their accounts payable activities.

Want to see how Modulr’s API can transform your business? Contact us today to see how we can bring your payment visions to life.

6 top benefits of using Modulr’s API for your AP payments

Modulr can help you innovate your business model, create a stickier product, improve your customers’ journey and scale your operations, without you having to go through the lengthy process of getting the right licences or becoming a regulated payment service provider.

Here are just six of the top reasons to use Modulr for your accounts payable API.

1. Automate your clients’ AP payments to reduce clunky processes and manual errors

Your customers will no longer have to leave your platform to make their accounts payable payments. With Modulr, you can embed our solutions directly into your software so customers can have a complete payment experience. Our tools cover every step of the payment journey, including:

  • Account creation and management for each of your customers.

  • Automated transaction input and submission.

  • Instant confirmation and reconciliation.

With our API, you can offer full accounts payable automation by adding payments to your product without disrupting your existing UI and CX designs. You can use our API to automate accounts payable processes and build payment flows that make your customers’ jobs easier and complement and improve on your original value proposition.

For example, a customer could set up a standing order to automatically fund their account on the 28th of every month. They also set up a scheduling rule that allows them to automatically submit their AP payments as soon as the funds hit their account. This setup enables them to meet their liabilities and manage cash flows more efficiently by waiting until the end of each month when they’re more certain to have liquidity. And their AP processing is completely automated, so their finance teams can save time.

With our API, your customers' AP payment possibilities are massive.

Get access to our sandbox and discover what our API can do.

2. Use fast payment methods to ensure customers’ accounts payables arrive on time

Your customers’ accounting teams work on tight deadlines yet have to deal with long payment processing times of up to three business days. This delay adds stress to your customers and frustration to their business partners. With Modulr, your customers can settle accounts payables within seconds thanks to our connection to fast payment schemes.

Your Eurozone clients can benefit from speedier payments through SEPA Instant Credit Transfer.

We also have a direct connection to the UK’s Faster Payment scheme, so your customers can settle transactions within 90 seconds, 24 hours a day, seven days a week. We submit individual payment requests to the network as soon as we receive them instead of sending them out in batch payments so your customers gain time and flexibility.

Regardless of the payment method, you won’t have to worry about outages at our end. Our systems never sleep with an uptime of over 99.99%. With Modulr, your customers’ invoice payments, vendor bills, and even payroll will  arrive on time.

3. Add payment scheduling to let customers settle invoices automatically

If your customers currently want to schedule payments, they likely need to download a spreadsheet to upload or manually input them in their banking app. Even then, their bank might not offer scheduling or would require them to log into an app for approval on the payment date. Others might allow scheduling but will block the funds until a specific payment date, which impacts their liquidity.

Then, they’d need to be sure the dates they choose to submit the payment don’t fall within certain time frames, such as non-business hours, weekends or holidays, to ensure invoice and bill payments can settle by their due dates. This manual scheduling means extra work and the potential for error from both keying mistakes or even missing a payment.

With our payment API, extra work, lost time, and risk are things of the past.

You can embed this scheduling functionality right into your platform and configure the AP automation to meet your business needs. This means you can add a scheduling feature to payment workflows so customers can set a payment date in your system. On the scheduled date, our API will trigger the payment request so it’s automatically submitted to the payment system that instant.

4. Send customers instant notifications once a payment settles

Reconciliation is a major pain point for finance departments, especially when it comes to matching the outbound payments on their bank statements versus what they see in their accounting software. You can automate and solve this problem with our webhooks.

Whenever a transaction happens in your customer’s payment account, you’ll receive a notification through our API. You can take this information to update your customer’s payment status without them taking any action.

The value of this feature grows with your volumes. For example, imagine a customer with hundreds of accounts payable each month. It’s entirely possible they have one person dedicated to reconciling invoices against data from their bank. Our webhooks do the job automatically. With Modulr, your customers can save time and resources while deploying talent to work on other value-generating projects.

5. Reduce errors, fraud and frustration with Confirmation of Payee

Your customers work with different suppliers depending on business needs. Whenever they have a new vendor to pay, there’s always a risk that account details will be inputted incorrectly. Or they could be the victims of authorised push payment (APP) fraud, where a fraudster is impersonating a legitimate vendor. When that happens, money goes missing, staff have to investigate, and everyone (including the new supplier) gets frustrated.

We help your UK-based customers avoid this problem with our Confirmation of Payee (CoP) service. CoP lets customers verify the recipient’s account information before making the transaction. With this service, you can:

  • Reduce fraud risk for your customers

  • Lower financial losses

  • Decrease mistakes, like manual keying errors

  • Give clients a more secure experience

For example, one of your customers receives their first invoice from a new supplier. But when your customer keys in the payment details, they mistype one number of the account. Your system submits a request to us via our API to verify the details. With CoP, your customer can see in real time that the keyed in account is a match, close match or no match through our API. Your customer can then correct their typo and pay the invoice as planned, while avoiding headaches and the risk of compromising a new business relationship.

Discover how to unlock growth with Modulr's account-to-account payments.

6. Create an additional revenue stream while keeping your customers coming back

You’re always on the lookout for new revenue streams while also increasing your brand loyalty. Our accounts payable payment API enables you to do both. You’ll save clients time and money by letting them make and reconcile payments without leaving your software. For that, you could charge them a processing fee or add this extra service to your superior pricing plans.

Your customers will also appreciate that they don’t need to leave your platform to complete their accounts payable. Giving them this convenience keeps them coming back, reduces your churn rate, and makes your product more competitive.

Are you working in a payroll company and seeing similarities with your challenges around payments? Payroll companies can also benefit from our accounts payable API. Check out our post on how we’re innovating the payroll payments experience for companies like yours.

How a leading accounting software company embedded AP payments with Modulr

A leading global accounting software company realised its customers had a major, unresolved pain point: manual AP payment processing. The firm specialises in helping small and medium-sized businesses (SMEs) manage their bookkeeping. These SMEs were processing accounts payable by calculating their AP in the software’s accounting system, manually keying invoice and bill payments in their banking app, and reconciling confirmations one-by-one. 

The company’s product team realised how this tedious invoice processing took a lot of their customers’ time and only became worse as business volumes grew.

The company reached out to Modulr to see how their embedded payment solutions for accounting platforms could solve this pressing issue. Modulr’s experts helped them create an automated accounts payable process where: 

  • Each customer received a dedicated payment account to fund and pay their AP.

  • Customers could schedule and submit payments directly via the company’s software platform.

  • Payments would go out immediately and confirmations would arrive through webhooks as soon as they settled.

The results were immediate, as customers could process payments on one platform and were suddenly free to focus on other tasks. Meanwhile, the software company saw revenue grow and churn decline, as their customers were happy to pay for a comprehensive solution and stick with them for their all-in-one accounts payable automation.  

What to look for in an accounts payable API?

If you want to add accounts payable automation to your accounting or enterprise resource planning (ERP) platform, the API you choose needs to provide smoother, more instant payment experiences for your customers, without disrupting your software. An accounts payable API should:

  • Integrate with ease into your platform. You’ve spent countless hours designing your user interface (UI) and customer experience (CX). The API you work with needs to complement those designs, not supplant them. Look for a lightweight API that plugs smoothly into your platform without tapping into your development team’s time to build out an infrastructure to support it.

  • Handle real-time payments. You customers spend hours calculating their accounts. They shouldn’t have to put in more hours by manually uploading files into their bank account to pay their vendors and suppliers. The API you work with needs to connect to the fastest payment schemes available where you’re operating, like Faster Payments in the UK or SEPA Instant in the EU.

  • Offer multiple payment methods. Your customers have different payment preferences. Your provider should enable you to connect with all the ones your customers prefer, especially the ones that let them settle payments quickly.

  • Allow payment scheduling. Your customers use your software to stay on top of their accounting. The API you work with should enable them to schedule transactions so they can save even more time with an automated accounts-payable payment system.

  • Keep you safe and compliant. You ask your customers to trust you with their financial data when making AP calculations. Look for an authorised payment provider that puts data security and compliance as its highest priority so you can maintain your customers’ confidence.

Use Modulr’s API to offer automated accounts payable payments to your clients

As you can see, the right API solution for your clients’ AP payments can make your product stickier, add an additional revenue-generating vertical to your software offer and, above all, save your customers hundreds of hours of manual processing and using multiple tools.

When you choose to automate your customers’ payments with Modulr’s accounts payable API, you embed a more comprehensive solution directly in your platform that will keep customers with you and help you innovate further payment solutions for them in the future.

If you’re ready to take your ERP or accounting software to the next step, we’re ready to help. Contact us today to get started.