Accounts payable is extremely important to businesses in a myriad of ways. AP affects vendor and supplier relationships, it has a significant role regarding cash flow, and it ensures that your business has the inventory you need when you need it. Accounts payable can be frustrating to deal with for businesses since it’s about money going out instead of coming in, but if it’s well-handled a lot of the more frustrating elements can be eliminated.
If a business doesn’t pay attention to accounts payable and rely on technology solutions like AP automation, they may find that they develop a poor reputation, and they’re likely going to be paying more because of late fees and interest charges.
When a business takes the necessary steps to manage accounts payable well, they not only have a strong reputation and good control over cash flow, but they can often negotiate better deals with their vendors and suppliers and ultimately save money.
So, with all that said, what are the top accounts payable trends affecting businesses right now?
Streamlined AP Workflows
Touched on briefly above was the ever-increasing importance of AP automation to most businesses. Along with that, there’s the concept of choosing AP automation that allows for a single platform to be used for the entire accounts payable process.
Another trend is an AP automation platform that integrates with financial systems and ERP, as well as credit card feeds, and tools used for travel booking.
The most modern businesses already understand the importance of not only using technology to facilitate better accounts payable processes but choosing one single platform that can be used from end-to-end.
Another trend that isn’t necessarily new but that is becoming increasingly pervasive in accounts payable is the use of mobile technology. This can go back to the trend above. Most AP automation software and technology offers mobile capabilities.
Mobile functionality allows for better visibility and efficiency, as well as more collaboration when necessary.
Businesses are constantly looking for ways to not only use technology, but to use it in a way that allows them to gain insight and visibility, and develop data-driven solutions.
This extends to accounts payable.
When a business is utilizing the right AP technology that provides extensive visibility options, they’re able to identify trends, spot areas where they could save money, and they can ensure costly mistakes aren’t being made.
With increased visibility, modern businesses are also able to improve their financial forecasting and improve processes even outside of AP.
Collaboration is something touched on a bit above, and it’s a trend that should be mentioned on its own as well. Collaborative accounting is often called the future of accounting.
Basically it means the integration of stakeholders and technology in a way that improves processes, and efficiency. Rather than there being such rigid silos in accounting, there is more cross-departmental work to optimize spending, payments and cash flow.
Information is available more quickly thanks to automation, and this allows for the collaborative approach to accounts payable. This can also reduce errors and the potential for fraud, because of more oversight.
Increased Attention to Compliance
There are certain data compliance laws that are paving the way for new trends to develop in accounts payable as well, such as GDPR. With new data compliance laws, companies are having to train employees and also put in place processes that take these into consideration.
There is a need for increasingly secure transactions, and there are more audits that finance departments have to face to ensure compliance. This all then leads to the need for intensive reporting and visibility, as well as ongoing data collection and record keeping.
Finally, there is also a push for accounting departments to no longer just be seen as focused on payments. Instead, they are being looked at as a part of the business that should be adding value to the organization. Some of the ways accounts payable departments are adding value is by reducing the cost of invoice processing, reducing errors that can be costly, and gaining discounts because of early payments and rebates.
For accounts payable to be looked at as a department that’s increasing profitability is in many ways a complete shift. The savings and rebates that can be earned through effective and efficient AP management can mean millions of dollars in savings depending on the size of the organization. That money can then be put back into the business to meet strategic objectives and improve cash flow.