What Does the Future Hold for Accounts Payable?
The past two years have been a whirlwind for accounts payable leaders. New ways of working. New operational challenges. New fraud and compliance risks. But those changes will pale in comparison to those the accounts payable function will experience over the next three years.
Accounts payable is undergoing a radical transformation, accelerated by the prolonged shift to remote and hybrid work and unrelenting pressure to achieve complete visibility into invoice data.
The accounts payable function of the future will be digital, data-driven, and strategic.
The transformation of accounts payable is long overdue. Most accounts payable departments – even those with some level of invoice processing automation – are mired in manual, repetitive tasks that drive up costs, increase the chance of errors, slow down cycle times, complicate reporting, and keep accounts payable staff and their managers from focusing more time on the things that matter most.
3 trends in accounts payable
Accounts payable becomes digital
Accounts payable professionals spend most of their workday bogged down with manual, repetitive tasks such as keying invoice data, shuffling paper, fixing errors and mistakes, chasing down information, and responding to telephone calls and e-mails from suppliers inquiring about the status of things. Even departments that have deployed invoice processing technology are not immune from manually handling the invoices they receive from suppliers. These manual processes can be blamed on the staying power of paper invoices and the hodge-podge of point solutions and closed-loop networks that most accounts payable departments have used to automate their invoice processing. As a result, it’s not uncommon for a department to handle a single invoice multiple times, even if the invoice was received in a digital format such as PDF e-mail attachment. That’s why more accounts payable departments are embracing a holistic approach to invoice processing and supplier payments that enables invoices received in any format, through any delivery channel, to digitally flow from receipt to settlement, without the need for human operator intervention.
Over the next three years, accounts payable departments will strive to have every step of the invoice-to-pay cycle processed digitally, with operators intervening only when absolutely necessary. The result will be a faster, more cost-effective processes with fewer opportunities for error. Digital technologies such as intelligent data capture, Robotic Process Automation (RPA), Artificial Intelligence (AI), and machine learning will help bridge the gaps that have traditionally created friction in the invoice-to-pay lifecycle.
Accounts payable becomes data driven
One of the lessons that businesses have learned over the past two years is that strong visibility into invoice data is invaluable to making enterprise decisions. Today, most accounts payable departments are hamstrung by manual and semi-automated processes where data isn’t captured, information isn’t timely, data isn’t well-organized, and systems are fragmented. As a result, senior management cannot access all the variables they need to make informed decisions.
Savvy accounts payable leaders will transform their function into an information hub. Digitizing the invoice-to-pay lifecycle will put smart insights into cash flow, corporate spending, operational performance, and potential fraud and compliance risks at the fingertips of the people who need them, no matter where they are. Intelligent capture of invoice data will be the table stakes. Graphical dashboards will provide real-time visibility into the status of invoices as well as Key Performance Indicators (KPIs). Drill-down capabilities will empower decision-makers to identify trends and uncover the source of issues. Ad hoc reporting will help decision-makers account for ever-changing information demands. Mobile access will keep decision-makers in-the-know while on-the-go. And seamless connectivity with enterprise resource planning (ERP) applications and other downstream systems will allow for 360-degree visibility into transactions and supplier relationships.
In this data-driven environment, insights will be more personalized, interactive, accurate, and timely than before. These insights will inform working capital decisions and provide stakeholders with better tools for planning, forecasting, managing risk, driving competitive advantage, and more. And it will all start with accounts payable.
Accounts payable becomes seamless
Fragmented systems are the norm in accounts payable. Poorly integrated systems and processes make it nearly impossible to efficiently perform day-to-day accounts payable tasks. Front-line staff cannot readily access all the information required to resolve invoice exceptions. Invoices do not flow seamlessly through approval or exceptions workflows. Data on approved invoices might be manually input into a system of record. And analyzing data in a meaningful way is difficult as information is buried within disconnected legacy platforms and is hard to access, aggregate or cleanse.
All invoice delivery channels will be consolidated onto a single platform. Organizations will automate the entire invoice-to-pay lifecycle, reducing manual processes, information silos, downstream exceptions, and overhead. Accounts payable will become tightly integrated with downstream systems such as ERP platforms. Data will be aggregated across systems for managing operations, working capital and projects. This seamless environment will create new efficiencies, drive better decision-making, improve corporate agility, and help businesses identify potential fraud and compliance risks more quickly.
Accounts payable has experienced tremendous changes over the past two years, both good and bad. But the transformation that accounts payable is poised to undergo will create a function that is more efficient, nimble, connected, and strategically valuable to the enterprise than ever before.