What does the future look like for accounts payable (AP)?
Over the past few years, AP functions have experienced rapid growth and technological advancements, moving from being a back-office function to an increasingly visible part of business operations.
As the economic crisis continues, and supply chain management becomes more challenging, it’s imperative that businesses ensure their accounts payable processes are set up for success.
Tungsten Network’s parent company, Kofax, recently sponsored a report by Ardent Partners called ‘Accounts Payable 2023: BIG Trends and Predictions’. By providing insights and analysis based on market research and case studies, the paper aims to help business leaders prepare for changes to the AP landscape over the coming year and beyond.
In this article, we’ll be providing a breakdown of all 10 AP predictions outlined by Ardent Partners in the report. To read the full paper which we’ll be referring to throughout, please click here.
Prediction #1 – The rise of autonomous AP
Artificial intelligence (AI) is transforming every aspect of our day-to-day lives, from powering personal assistants to wearable technology and self-driving cars. When it comes to accounts payable, the impact that AI can have is no different.
Autonomous AP uses technologies such as AI, machine learning, predictive analysis, and chatbots to automate accounts payable processes. Imagine a scenario where invoices can be received, validated, coded, approved, and paid automatically, with no human interaction. This is what autonomous AP makes possible. Moving forward, it’s predicted that these technologies will be used more collectively, improving efficiency and productivity.
Prediction #2 – The pace of digital transformation across AP functions and B2B payments gains momentum
Digitising AP functions has proven itself to be an effective means of lowering costs, increasing business resilience, and improving the accuracy of payments. That’s why AP automation has been gaining so much traction over the past few years. As the economic climate remains turbulent, the interest in automating AP functions is expected to keep rising.
Prediction #3 – Suppliers start to demand faster payments
Over the past few years, supplier-buyer relationships have shifted massively, from buyers calling the shots to suppliers now holding all of the power. Amid the cost-of-living crisis, financial uncertainty will lead to increasing demand by suppliers to get paid faster. Quicker payment times will help suppliers to inject the cash back into their operations and minimise the need to seek outside credit.
As a result, AP functions should expect suppliers to request early payments and show more interest in collecting early discount offers. Early payment discounts could also benefit buyers as — by paying early — they are able to pay less than the full invoice amount.
Prediction #4 – Supply chain improvements benefit AP teams
On the subject of the recent supply chain challenges, enterprises, and governments have been hard at work enhancing supply chain resilience and reliability. Research by EY found that 60% of executives say the pandemic has increased their supply chain importance, and 45% of supply chains are expected to be mostly anonymous by 2045. Improvements have already started to be rolled out globally, expected to improve the transparency, sustainability and agility of supply chains. Better supply chain management can ease pressure on AP functions which are relied upon to retain and improve supplier relationships.
Prediction #5 – Economic challenges begin to ease by Q3 2023
Inflation rates have soared exponentially over the past couple of years, rising from 4.7% in 2021 to nearly 9% in 2022. However, many central banks across the world have been taking action to curb inflation and thankfully, there are some positive signs of financial recovery.
The International Monetary Fund forecasts that inflation will fall to 6.5% in 2023, and to 4.1% in 2024. As such, Ardent Partners predicts that we’ll start seeing lower levels of inflation from Q3 2023.
Prediction #6 – The traditional office environment is no more, with knock-on effects for AP functions
Since the pandemic in 2020, Ardent Partners’ conversations with AP professionals have revealed that most organisations have readjusted their workforce strategies and now have some level of remote or hybrid working in place.
For accounts payable, this means ensuring that distributed workforces have access to the necessary tools and equipment. It could also mean managing timely and accurate payments for employees in multiple countries if there is a ‘work from anywhere’ policy.
Prediction #7 – Spend management becomes a priority for CFOs in the mid-market
Today, data is driving every element of business operations from understanding customers to making more informed decisions. As CFOs and leadership teams become more sensitive to organisational spending, there will be more of a focus on improving outdated technology and data management systems to gain a clearer picture of spending habits.
For AP functions, this could mean increasing their data-sharing capabilities to provide the wider business with relevant information and help cut costs.
Prediction #8 – Accounts payable automation accelerates in the mid-market
While the digitisation of AP functions has been happening across enterprise-level organisations for quite some time, small to medium-sized businesses still have some catching up to do. Ardent’s research has revealed that the technology adoption rate is much higher among larger companies. However, the benefits of AP automation apply to businesses of all shapes and sizes, and solution providers are beginning to notice a gap in the market.
More and more vendors are starting to develop AP automation and B2B payment offerings tailored to meet the needs of smaller organisations — including solutions that are easy to install, simple to use, and economically viable.
As an increasing number of mid-market companies become aware of the cost-saving and productivity-driving benefits of AP automation, adoption is expected to increase massively over the next few years.
Prediction #9 – Supplier onboarding will leverage AI and machine learning
Artificial intelligence (AI) is revolutionising almost every aspect of the way we do business, and AP is no exception.
One of the most challenging obstacles faced when implementing AP automation is the onboarding of suppliers to submit invoices and receive electronic payments. Over the coming years, advancements in AI and machine learning will enable organisations to capture the information required to onboard vendors more safely and with increased accuracy.
Prediction #10 – Careers in AP will become a professional launching pad
As the responsibilities of an AP function become wider, it’s predicted that careers in accounts payable will become a launching pad to more strategic roles. The increasing visibility of AP across an organisation, in combination with advances in technology adoption and access to data, will provide AP teams with a broad set of skills that could be utilised in other areas of any business.
Certifications in AP are beginning to become less meaningful for driven AP professionals who are more focused on adding value to the wider organisation and gaining skills in finance, stakeholder management, data analysis, and more.
AP predictions - a conclusion
While the beginning of 2023 might look pretty bleak - with a financial crisis and supply chain challenges to contend with - there is light at the end of the tunnel. These data-backed predictions by Ardent Partners indicate that advancements in automation and AI will continue to propel AP and P2P functions further into the future. Then there’s the increased appreciation for and investment in accounts payable across mid-sized companies, along with some positive signs that the economy may start to recover.
There are good times ahead for AP professionals, as their days of being seen as behind-the-scenes administrators are over, and their importance as a business-critical operation is recognised.
Transform your AP function and adopt e-invoicing with Tungsten Network
As a global leader in invoice automation, Kofax and Tungsten Network can support organizations at every level of maturity in their journey towards true e-Invoicing. We can help your business adopt e-invoicing and drive digitisation across accounts payable whilst ensuring you and your supply chain remain compliant amid legislation changes, as well as improve operational efficiency and turn your AP function into a profit centre.
To find out more about how we could help you achieve AP automation, read our case studies or book a demo today.
To see what trends are impacting AP functions this year, click here.