Accounts Payable trends transforming companies’ finances today. Businesses need to be ready for significant changes in the accounts payable industry. In 2023, technology improvements and upgrades are on the focus of companies across industries as technology continues to be a driver of growth for today’s successful businesses.
Inflation is a major factor that impacts AP operations, as it affects the purchasing power, cash flow, profitability, and liquidity of businesses. Inflation also puts pressure on AP teams to negotiate better payment terms, optimize working capital, and leverage supply chain financing options. According to a report by Ardent Partners, inflation is the top priority for 43% of AP leaders in 2023. Hence beating inflation has brought long-term cost saving initiatives.
Top 7 Accounts Payable Trends 2023
As technology continues to transform the accounting industry, businesses must know about the trends shaping the future of Accounts Payable. Here are the top five trends shaping accounts payable in 2023:
1. AI-Powered Automation
Accounts payable is moving towards automation with advanced technologies, like Artificial Intelligence (AI) and Machine Learning (ML). AI and ML integration is a trend itself within accounts payable automation. The benefits of accounts payable automation are well documented.
- AI-powered automation can streamline time-consuming and mundane manual tasks, including invoice processing, data entry, payment reconciliation, etc., letting accounts payable departments to focus on more strategic work.
- Automation not only saves time and capital but is a competitive necessity in the fast-paced business world.
- Digitized payments in accounts payable automation also contribute to maintaining favorable relationships with suppliers and vendors by ensuring accurate and prompt payments.
Previous data shows that the majority of accounts payable units (around 54%) are partially automated. Increasing accounts payable functions are now fully automated (9%) compared to 2019 (5%). Let us discuss the top 5 trends of accounts payable in 2023 shifting businesses towards outsourcing.
To stay ahead of the curve, companies are increasingly opting for accounts payable outsourcing services for automation. Companies should consider that the global finance and accounting BPO market (worth USD 56.42 billion) is projected to grow at a CAGR of 9.1% from 2023 to 2030.
What is the Purpose of AP Automation?
Cash flow and payment terms are a core focus for AP teams, as they determine how well a business can manage its liquidity, profitability and supplier relationships. AP teams need to provide accurate and timely data on cash flow and payment terms, as well as collaborate with other functions such as finance, procurement and treasury. AP teams also need to balance the trade-off between paying early to take advantage of discounts or paying later to extend days payable outstanding (DPO).
2. Blockchain Integration in Accounts Payable Processes
Blockchain is an opportunity for enterprises looking for a completely digital and secure database. This digital database captures and aggregates records (or blocks). Each block is linked to a previous block for easy record updates and creates a chain. This technology can bring a major change in the way businesses handle their accounts payable.
- First, it helps businesses to streamline their Accounts payable processes and ensure a more efficient accounts payable process, leading to improved trust among suppliers and lenders. Information held on a Blockchain existed as a shared and continually reconciled database, making the accounts payable processing fast.
- It can also help accounts payable teams to process and track payments in a more secure, and transparent way. Simply because It can record transactions efficiently in a verifiable and permanent way. Decentralized information mitigates the chance of corruption. Based on a distributed ledger, blockchain keeps the transaction records secure.
3. Shift to Cloud-based Solutions
As more organizations seek cost efficiency, greater flexibility, and enhanced security, there is a rising trend toward cloud-based accounts payable solutions. The adoption of blockchain technology to improve accounts payable functions is forecasted to grow in 2023. It pushes automation to greater heights.
- The advent of cloud computing has changed the accounting landscape radically. With cloud solutions, companies can access their real-time accounts payable data and procedures while enhancing security, and cost-effectiveness.
- Moreover, cloud-based accounts payable solutions with the benefit of remote access, make it easier for teams to work from any location, and reduce the risk of downtime due to system outages.
Instant collaboration, and shortening the invoice approval process are among the key benefits of cloud-based accounts payable solutions. Businesses prefer partnering with an experienced account payable service provider who can assist them in expediting invoice processing and lowering the risk of data violations.
4. More Reliance on Digital Payments
As today’s world becomes increasingly digital, accounts payable functions are shifting toward e-payments for a faster, more efficient, and more secure solution than conventional payment methods. Most transactions will be touchless as automation and blockchains reach deeper into finance and accounting.
- Integrated digital payment systems can help companies to improve cash flow and offer greater control over spending also.
- It makes it easier to control invoice approval and payment authorizations.
- E-payments save time and money and decrease errors. Payments using checks involve a lot of manual work, like, printing, signing, and mailing. It also increases the efforts involved in handling multiple documents.
- Digital payments also mitigate the risk of fraud and errors while giving accounts payable more insight.
- Digital payment can help maintain vendor relationships with timely payments and vendors can offer cashback or discounts, which helps to save costs.
- Online billing management and e-invoicing will continue to grow as more businesses adopt digital solutions to streamline their invoice processing and payment workflows.
- It can help reduce paper usage, manual intervention, errors, fraud and costs. They can also improve compliance with tax regulations and e-invoicing mandates that are being implemented in many countries around the world,
Hence, digital payments are the trend, paving the path to efficient Accounts Payable functions.
5. Increased Emphasis on Data Security & Privacy
A company’s accounts payable records contain enormous information. Therefore, data security and privacy are critical matters for enterprises. In the digital world of 2023, accounts payable teams need to ensure adequate measures to guard against sensitive financial data. It includes multi-factor authentication, enforcing secure payment processing protocols, and encrypting data. Remote work needs accounts payable units to ensure that their systems are secure.
To gain a competitive edge in today’s business environment, companies need to take strategic steps considering these trends.
6. Data Science
Data Science will improve accounts payable by providing insights, analytics and predictions that can help AP teams make better decisions, optimize processes, reduce risks and enhance performance. Data science can also help AP teams leverage big data, business intelligence (BI), and advanced reporting tools to gain visibility and transparency into their AP operations.
7. Mobile Capture & Document Access
These services will enable AP teams to process invoices and payments anytime, anywhere, using their smartphones or tablets. Mobile capture and document access can help improve efficiency, convenience, accuracy and security of AP processes. They can also help AP teams collaborate with remote workers, suppliers and customers more effectively.
ARDEM - Account Payable Service Provider
As a competitive accounts payable outsourcing services provider, ARDEM offers a range of solutions that allow their clients to keep pace with the latest trends. Our accounts payable solutions include:
- ARDEM offers accounts payable automation solutions using advanced technologies, like, AI and Robotic Process Automation (RPA). Companies can automate the entire accounts payable department or specific tasks, like, data entry, approval, invoice processing, and reconciliation.
- The renowned accounts payable outsourcing services can help companies to improve operational efficiency and reduce costs with better data analytics and detailed accounts payable reporting.
- Robust security protocols employed by the experienced account payable service provider – ARDEM attract most enterprises worried about protecting their sensitive financial data. They ensure compliance with regulations across industries.
- Accounts payable automation solution through our proprietary software, the AIM (ARDEM Invoice Capture & Extraction). AIM enables accounts payable departments to achieve a 99.7% accuracy in extracting data and processing invoices.
Thus, enterprises can stay focused on their core business activities by outsourcing their accounts payable functions to ARDEM. Benefiting from the expertise of an experienced account payable service provider, businesses can reduce costs, and mitigate the risk of fraud, errors, and compliance issues.
ARDEM provides Business Process Outsourcing and Business Process Automation Services to established companies to help them improve operational Efficiency and Reduce Costs. For more information please reach out to us at email@example.com or call us at 908-359-2600.