Under the global industry perspective, there is accelerating adoption of accounts payable automation through outsourcing services. It will drive the growth of the global AP automation market in the years ahead.
According to the Zion Market Research report, the global accounts payable automation market is expected to reach around USD 1,567 million by 2025, with the adoption by every industry, including SMEs and MSMEs. Additionally, the evolving cloud-based technology is fueling this growth considerably.
To justify the cost-cutting demand, the year 2021 is already slated to witness accounts payable outsourcing services surge in strategic value for businesses. In the current economic environment, every organization is looking for cost-cutting measures, and AP outsourcing is one of the proven vehicles for cost-cutting as well as increasing efficiency.
Upcoming Trends for AP outsourcing for the Year 2021
- A move from territorial to global deals, with the onset of the worldwide pandemic crisis. This is expected to accelerate in future.
- Demand for Multi-function AP outsourcing. As most CFOs are keen for AP outsourcing for all complex aspects such as financial closure, associated back-office functions, reporting, and others. Earlier, only a few selected AP processes like credit control were outsourced.
- The undeniable need for automation is also making most businesses outsource AP. AP automation has been a dominant trend in 2021 with an eye to keep minimal costs for preparedness for lockdown like situations as experienced in 2020 worldwide.
- There will be an increased demand for employee scalability as the global economic scenario is yet to revive. Therefore, most companies will adopt AP outsourcing systems with a flexible cost structure that can do justice with the seasonal AP workload. It is a structure that reduces/increases relevant staff with a lowering/expanding of business volume.
Thus, AP outsourcing is much more for a company than a bunch of processes and can be said to be a powerhouse of expertise, whether technically or otherwise. You can look forward to increased innovations and processing ideas to streamline that tricky AP system.
Save Cash With Efficient AP in 2021
Payment Automation to the Rescue
Digitized payments in Accounts Payable automation allow companies to issue payments remotely, with real-time tracking. There will be 24/7 access to payment information. Quick payments can provide the benefit of monthly rebates. Businesses can eliminate most of their accounts payable checks and save on check printing supplies, MICR toner, check stock, envelopes & postage.
Invoice Processing Automation Adds Efficiency
Invoice automation enables Accounts Payable departments to automatically move eInvoices into a digital workflow that consists of three-level recognition and auto-fraud detection. It also facilitates remote approval processes, multi-factored approval workflows, notifications at the arrival of invoices, flags for immediate payments and updated information, custom scanning, reports if amounts vary, PO and invoice matching, alerts for invoice duplication. The Accounts Payable department will have complete control of the invoicing process and with automated invoice matching you can avoid costly late payments. Thus, it will save you from any loss or penalty.
Aligning With Supplier Master Data Saves
Manage and maintain the negotiated terms with vendors in an orderly system. Fallacious entry of this data can result in payment errors, account delinquencies and may even lead to disruptions in supply. It will regularly update payment terms and the availability of volume discounts, trade credits, and other periodic rebates. If supplier contractual terms get renegotiated, the supplier master data will also be changed.
Working Capital Optimization
Businesses that can sustain lower working capital while satisfying business requirements have the most potential to realize higher profits. These are the businesses that can impart more funds to their future growth.
Based on the Deloitte reports, among numerous ways to free up net working capital, accounts payable is most efficient. With its strategic approaches, it helps companies optimize working capital and enables more cash in hand.
Following are the two main tactics that position accounts payable as a focal contributor to optimizing working capital, in conjunction with the procurement department:
- Improved financial visibility
AP automation with outsourcing facilitates real-time visibility into all business liabilities from purchase through to payment. It equips them with tools to optimize payment terms and secure settlement discounts that directly contribute to working capital optimization with reduced cost of goods or products. It helps to evaluate cash flow and monitor budget performance to make strategic business decisions.
- Centralized processing
With the centralized accounts payable system, all staff members adhere to established standards. Such a shared service environment helps businesses to optimize their working capital. It enables you to measure their performance based on these business metrics, no matter where they are in the world. You need not put additional check systems.
Reducing Supplier and Vendor Processing
- The accounts payable process includes getting the vendor’s payment bill, generating a three-way match, products receipt, purchasing orders, approval of invoice payment by AP department, reconciling variances, and finally, the payment is to be made.
- Outsourced account payable automation will replace all the paperwork to the digital workflow, and the updated information will be available in digital format. End-to-end Invoice workflows, and 100% of invoices will be automatically tracked. You will have master data with proper guidelines and updated terms information. Also the digital flow chart at the end of the month will be easily doable. Such easy access to data through effective procure-to-pay tools under the AP system will aim to reduce supplier and vendor processing. You can maintain strong relationships with vendors without any embarrassing mistakes or reconciliation hassles.
ARDEM - AP Outsourcing Services to Lower Your Costs
ARDEM has put together a dedicated Accounts Payable team to run your process like its own to eliminate manual effort and increase efficiency. With ARDEM Automation, you will have a streamlined process, from receipt, approvals, to payments, to handle all of your invoices 100% on time and with assured quality.
- We can work in your system using our accounts payable outsourcing services if you already have a documented process, or can set up a training session for you to share your process.
- We ensure 99.97% Accurate Invoice Data Extraction.
- Invoices are scanned and run through OCR technology to create readable documents.
- We also combine the latest ML and AI technologies for data interpretation swiftly.
- With our large pool of qualified and trained analysts, we ensure quick scaling as you grow.
- With PCI DSS 3.2.1 Compliance, we securely manage sensitive data.
Thus, if you are struggling with your accounts payable and find yourself spending substantial working capital and hours to ensure that your company makes timely payments, you can utilize the outsourced accounts payable services by partnering with future-oriented accounts payable services like ARDEM. Let us spend some time on understanding your processes and advising the best possible.