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6 Accounts Payable Automation Trends in 2021

It’s time to take the accounts payable (AP) department from the “back office” to front and center in your organization’s automation strategy.

In many businesses, the accounts payable (AP) department traditionally occupies a back office role. While the department’s work is critical, it is easy for businesses to overlook AP processes as a part of the big picture for success. Today, with the volume and speed of digital business, the importance of these processes and the friction that they can create are easier for businesses to recognize.

Staying up to date on the latest accounts payable automation trends is key to identifying ways for your business to adapt and evolve. To bring you up to speed, we’ll cover these topics:

 

Showcasing Major Accounts Payable Trends

Accounts Payable Automation Market

After a year in which almost everything about the way we do business changed, 2021 is a renewed opportunity for businesses to invest in their future success and stability. With rising demand for AP automation and a market size that will approach more than $4 billion within the next four years, many more companies are recognizing the inherent value of new and advanced solutions.

Currently, there are six key trends in accounts payable automation to consider.

AI Makes AP Smarter

Among the many tools available, software enhanced with machine learning and artificial intelligence (AI) is experiencing the biggest boom in popularity across organizations. AI is often the answer to the question, “How does automated accounts payable work?” With processes such as cognitive capture, which automatically classifies scanned invoices and extracts relevant financial data into your systems, many common processes can now take a fraction of the time when compared to manual processing.

Accounting Software Takes Over

AP has traditionally been the domain of too many manual processes to count. From typing in purchase order numbers to scanning and transcribing invoice data, these processes made sense 10 to 20 years ago—but they don’t today. Advanced invoice software reduces manual tasks, making it easier to conduct complex tasks such as two-, three- and four-way matching with greater reliability. Smart software also makes it simpler to detect and correct errors.

Data Analytics and Forecasting Tools Provide Vital Intelligence

Think about how much data your department generates. It isn’t just the dollars and cents that you owe to a vendor: AP has significant effects downstream regarding cash flow, company liabilities, spending habits and more. Other departments can repurpose and use this information to make important business forecasts. Reaching this data is the biggest challenge—but with AP automation solutions that take seconds to generate reports, it is now within easy reach.

The Digital Transformation Continues

Worldwide disruptions to business and the way that we worked in 2020 will have lasting effects for many years to come. One of those effects is a sudden spotlight on automation for many C-suite executives.

When manual AP processes bogged down in pandemic-related bottlenecks, the potential impacts on business continuity magnified. As a result, more leaders are embracing the fundamental changes that accompany automation, driving a need for agile and modern AP automation solutions.

Online Collaboration and Empowering the Remote Workforce

Automation is a clear and critical helper amid the normalized trend of remote work. Even as some businesses transition back to the office, others choose to make remote work permanent.

Paper-based processes—especially those related to invoice approvals, check signing and payment—have been exposed as fundamentally flawed in the 21st century. As a result, more automation solutions include development efforts for enabling frictionless online collaboration to keep processing times reasonable.

Data Security Takes Priority

It seems that every few weeks, there’s another story about a major malware infection. While automation solutions can speed up payment processing, they must also protect and conserve the inherent privacy of the data they handle. Going forward, expect an even greater focus on how AI tools can safeguard information.

Each of these trends ties into a simple fact: The old way of doing things can’t keep up with the high-volume and rapid-fire demands of modern business. We can move forward by adapting and implementing better technology.

Discover the potential of solutions such as automated invoice processing through Kofax ReadSoft®. Tapping into these trends for your business is simpler and faster than you might expect.

Using Trends Forecasting in Your Planning

Using Trends Forecasting in Your Planning

Let’s focus on one key trend: forecasting. How can a company make effective use of such tools while it is making plans for the future of the business? Using these forecasts in your planning is a key element of reducing risk and increasing opportunities for realizing additional value.

Rolling Forecasts and Budgets Are Key

The ebbs and flows of business can be difficult to predict, but when you have constant access to a wealth of historical data and new information, making rolling forecasts becomes easy. AP can contribute valuable insights for the business as a whole. Rolling forecasts make it easier to build budgets with a clear view of the company’s spending patterns.

Communicate, Communicate, Communicate

Data siloing is an obstacle for modern AP teams. It’s crucial to ensure that communication is free. The flow of information between AP and other departments, such as purchasing and receiving, is essential to keeping your cycle time down. With automation, you can break down silos and ensure the right information reaches the appropriate individuals with as few delays as possible.

It’s a Team Sport

No one individual can handle this entire process from end to end. With tools that make collaboration simpler, sharing answers to common questions and resolving exceptions takes far less time and effort. The result is often faster payment and happier vendors.

Plan for Various Scenarios

How will your business react to the sudden unavailability of products from a critical supplier or a change in demand that causes prices to rise? Answering such questions can be challenging, but better informational analysis makes contingency planning a routine effort. In this way, AP automation can even assist with risk management.

How Can Accounts Payable Be Improved?

What can a top performer achieve?

As you look toward the future of your department and examine the way that the business handles payment processing, it’s worth considering how to improve your efforts while leveraging the latest trends. Going forward, what are some of the ways that you can focus the efforts of your AP teams to make companywide improvements?

Track What You Do—Meticulously

Never lose an invoice or wonder why purchase order numbers don’t match up again. By automating the process of entering this data into the system and checking information flagged as incorrect, you can catch and resolve exceptions early. At the same time, you can see the lifespan of a purchase at a glance throughout the AP cycle. This granular information is key to effective work.

The Value of Goal Setting

Assess the way your department works and which KPIs the team is hitting regularly—and which they aren’t. With goals to work toward, you can direct your efforts to re-training, automation implementation and the areas where changes will provide the most benefits.

Improving Cost to Process

How much money does your business spend per invoice? For many organizations, the answer is “too much.” It’s always worth trying to drop cost per invoice. Removing manual steps, speeding up processing and making exception-handling a built-in part of the process can drop the cost of every invoice.

Conclusions About the AP Department of Tomorrow

A revolution is underway in accounts payable thanks to ongoing advances in process automation, AI and more. The six trends defining the present direction of AP all lead toward the same goal: providing the swiftest and most cost-effective processing possible to keep vendors happy and your costs low.

Automation affords businesses the benefits of greater visibility and enhanced capabilities for drawing deep insights and creating forecasts from AP data. With these benefits in place, your AP department can assert its importance and highlight its impact on the company’s bottom line.

Learn about the advantages of AI-enhanced automation solutions for critical financial processes and discover solutions that have the potential to transform the way your teams work.