The Top 7 AP Automation Trends for 2023

Last updated on March 4th, 2023 at 01:19 am

Whether you like it or not, automation is on its way to Accounts Payable.

Here are some AP automation statistics to consider per The Institute of Financial Operations and Leadership (IFOL):

• 9% of AP teams are fully automated.
• 54% remain partially automated.
• 68% manually key invoices into their systems.

Some of the challenges for AP processing are as follows:

• 22% — Delays due to the time spent processing invoice exceptions.
• 21% — Too much manual data entry.

The advent of technology such as artificial intelligence (AI) is revolutionizing the way invoice processing and other core AP activities are conducted. Not only does this automation save companies time, money, and resources but it also gives them a competitive edge in an ever-evolving world filled with remote workforces, limited talent sources, and supply shortages.

This shift towards replacing manual labor with automated processes can significantly reduce the number of redundant tasks thus allowing businesses to spend more time on their vendor relationships instead of purely transactional matters.

Here are 7 AP automation trends expected to take hold and continue into 2023.

7 Accounts Payable Automation Trends to Watch

Photo by Tima Miroshnichenko

Cash Flow Rules

In today’s uncertain economic climate, cash flow has become the most important priority according to CFO.com. With increasing costs of goods and the possibility of a recession looming, it is critical that both suppliers and buyers pay close attention to their cash flow.

The manual tracking and forecasting processes that are traditionally used can no longer keep up with the speed at which markets move, so there is a need to digitize the accounts payable process. This is why accounts payable automation solutions are becoming increasingly popular in order to make financial management faster, easier, and more accurate.

An AP automation solution can streamline the accounts payable process from purchase orders to payments in order to improve cash flow management.

It provides full visibility into your finances by allowing you to track all orders and payments as soon as they’re made, giving you greater control over budgets. Furthermore, these solutions have analytics capabilities that make it easy for users to generate reports on their expenses quickly.

In addition to increased visibility into your finances, accounts payable software can also automate those wonderful mundane tasks such as verifying data entry accuracy or validating vendor invoices.

This will save you time and money. Automation solutions can also reduce errors in manual processes while providing access to real-time data when needed.

The analytics capabilities found on most accounts payable automation solutions make cash flow forecasting easier than ever before; businesses can now optimize their purchasing decisions in order to maximize savings while still meeting financial obligations on time. This is something that is especially important during economic downturns.

When paired with smart features such as reverse payment reconciliation or automated early payment discounting, businesses will be able to gain better control over their cash flow while freeing up working capital for other investments like employee payroll or marketing initiatives – helping them stay ahead of the competition during difficult times.

Overall, AP automation solutions provide finance executives with a powerful tool for managing their accounts payable process more efficiently, accurately forecasting cash flows and ultimately improving business operations across all departments

Real Time Payments Will Rise in Popularity

As the digital payment landscape rapidly evolves, Real Time Payments are quickly becoming a popular trend among businesses of all sizes. With experts predicting that RTPs may become mainstream by this year’s end, more and more companies are evaluating the pros and cons of the technology.

At its core, Real Time Payments allow for quicker transactions between two parties without any delays in processing or clearance time. This is made possible due to its instantaneous nature. Accounts payable teams who have traditionally had to wait several days or weeks before payments were cleared by banks will benefit immensely from this.

In addition, RTPs are also much more secure than conventional payment methods as each transaction is authenticated using encryption protocols which reduce the risk of fraud or identity theft. This makes it an attractive option for companies looking to ensure the safety of their customer’s financial data.

Finally, because most RTP solutions provide real-time tracking and reconciliation tools, AP teams get better visibility into their purchases and payments – allowing them to make smarter decisions when it comes to budgeting and forecasting cash flow trends.

Overall, Real Time Payments offer many benefits over traditional payment channels such as faster transaction times, improved security measures, and better visibility into purchases and payments.

Expect RTPs to be a top priority for CFOs seeking modern accounts payable solutions that meet their compliance requirements while improving efficiency across their finance operations.

Reference: SP Global

Photo by Karolina Grabowska

Expediting Payment Timelines Is Also a Major Focus

As businesses look ahead at the financial challenges of 2023, accounts payable teams will be under increased pressure to focus on expediting payment timelines. Vendors and customers alike are looking for ways to secure their cash as quickly as possible, so AP teams must find more efficient ways to manage their accounts payable processes.

Fortunately, with the help of accounts payable automation tools, this can be achieved with greater ease and accuracy than ever before. Automation solutions allow for faster invoice processing and early payment discounting which reduces time spent on manual entry and minimizes errors in data collection.

Streamlining the purchase-to-payments process also means payments can be completed faster; both vendors and customers alike can benefit from improved cash flow management.

Moreover, automated solutions provide financial managers with greater visibility into their invoices by providing real-time data on all orders and payments – allowing them to make smarter purchasing decisions while ensuring that vendors are paid more quickly.

They also enable users to accurately forecast their cash flows in order to avoid any surprises when executing a budget or running a report. This is especially useful during times of economic instability where even small changes in cash balance could have an immense effect on business operations.

Overall, Accounts Payable teams should focus on expediting payment timelines in 2023 by using AP tools such as automation software or services that allow for real-time tracking of orders and payments while making sure vendors are paid on time. By doing so they can ensure that businesses stay competitive by improving cash forecasting models while meeting financial obligations without sacrificing working capital.

Data, Data, Data

In the ever-evolving digital landscape, artificial intelligence (AI) and data analytics are gaining more attention from the accounting and finance departments.

With more than 70% of organizations confirming increased investments in AI and advanced analytics for 2023, it’s clear that businesses are looking to capitalize on these new technologies to extract valuable information from the various processes of accounts payable.

By leveraging AP automation software and data analytics capabilities, organizations can quickly transform vast volumes of financial data into digestible reports. This will allow them to get a deeper understanding of their accounts payable operations – without putting an additional workload on their staff.

Apart from improved visibility into payments and invoices, AI can also be used for predictive analysis which allows users to spot any irregularities or fraudulent activity before it happens.

Companies can use natural language processing (NLP) to discover hidden trends within their AP data and gain new insights that can inform future decisions and strategies.

At the end of the day, by leveraging AI and data analytics in their accounts payable operations, companies can improve how they manage their finances as well as cut down on costs associated with manual tasks such as invoice verification or vendor payment processing.

This is what makes AI technology so appealing for CFOs who are seeking smarter ways to operate their business’s finances while staying compliant with regulations or industry standards.

Photo by Tima Miroshnichenko

Fraudsters Will Continue to Test Vulnerabilities

Fraud is a serious risk that all businesses must be aware of, especially in the current digital work environment. Two thousand twenty-one saw 98% of B2B firms reporting fraud attacks, resulting in an average loss of 3.5% of their annual revenues.

With communication gaps and security vulnerabilities becoming more prevalent within hybrid teams, fraudsters have found yet another way to access private financial data.

In response to this surge in fraud activity, Financial Management Magazine reported that controllership and compliance initiatives would be a huge focus area for CFOs in 2023. This requires accounting and finance teams to upskill or find new staff who can help strategize the best ways to protect internal systems from potential threats.

A key point of attack for these fraudsters is present within accounts payable processes. The manual entry inputs and lack of data integrity checks can lead to errors that hackers or malicious actors can use to bypass security protocols and gain access to valuable financial records or purchase histories.

AP automation solutions tackle this issue by improving security measures with automated audits, real-time testing, and sophisticated analytics capabilities that detect any suspicious activity before it happens.

Automation also eliminates manual processes that could lead to errors or fraudulent activity such as invoice verification or vendor payment processing.

By streamlining the AP process and introducing new technologies like blockchain for example, finance executives will have a better chance at mitigating risks of fraud while protecting sensitive customer information from cybercriminals.

Hybrid and Remote Teams Are Here to Stay

With the pandemic continuing to reshape the way we work, it’s no surprise that remote work is becoming increasingly popular among businesses of all sizes.

This shift towards digital-first operations has put a great deal of pressure on accounts payable teams to reorganize their workflow and transition from manual tasks to automated ones.

The good news is that many automation software products offer accounts payable teams the flexibility to adjust their operations quickly and efficiently.

From invoice processing and payment reconciliation to vendor management, automation platforms such as AI-powered bots can save companies time and money while allowing them to focus on higher-value projects such as supply chain optimization or strategic budgeting.

What’s more, as younger generations continue pushing for greater flexibility in the workplace, AI technologies will help ensure that organizations can accommodate these demands without sacrificing quality or accuracy in their accounts payable processes.

Automated systems also have built-in functions like rule-based processing which allow users to configure preferences in order to better streamline their daily activities – reducing error rates and ensuring compliance with industry requirements.

At its core, AI technology paired with flexible working arrangements will allow businesses of all sizes to efficiently manage their accounts payable operations while making sure they are meeting customer needs – delivering a true value experience for everyone involved.

Integrations and APIs Will Skyrocket Efficiency Levels

In the age of automation, more and more businesses are leveraging sophisticated APIs and integrations with their accounting software in order to improve their accounts payable operations.

Thanks to advancements in artificial intelligence (AI), leading AP automation platforms that already integrate with major accounting software such as SAP or Oracle – are creating a consolidated workflow from end to end.

Through API integrations, companies can customize integration capabilities according to their own business operations, as well as benefit from up-to-date data on both supplier payments and customer invoices.

This allows them to easily reconcile accounts and detect any discrepancies effortlessly. On top of that, AI technologies further reduce the chances of human error when executing tasks within the AP cycle – helping organizations stay compliant with industry standards at all times.

In addition, APIs open up even more possibilities for innovation within accounts payable operations.

With a unified system that connects all data points associated with an organization’s finances, companies can develop new applications or solutions tailored specifically to their own needs that would otherwise be impossible without these advancements in technology.

Overall, AI combined with API integrations is revolutionizing how businesses operate their AP systems – providing greater efficiency and accuracy while simultaneously reducing risk factors across the entire finance team. As such, integrating accounting software and APIs is quickly becoming one of the most popular trends in accounts payable automation today.

TL: DR — Got More Pictures?

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[Infographic] The Top 7 AP Automation Trends for 2023

What Is AP Automation?

AP automation is a term used to refer to the use of technology and automation tools to streamline, manage, and optimize accounts payable processes. With AP automation, businesses are able to save time on manual tasks such as data entry, invoice processing, and payment reconciliation.

Accounts payable automation also helps organizations reduce errors by introducing features such as automated approvals or rule-based decisions. This way, they can ensure that all invoices are quickly reviewed and approved in accordance with their established procedures.

Additionally, automation tools often come with compliance features that help identify potential fraud risks and potential financial misstatements before they affect the organization’s bottom line.

Overall, AP automation offers businesses a range of benefits such as increased efficiency, improved accuracy, and cost savings – making it an essential tool for any modern finance department.

What Are the Benefits of AP Automation?

• Save time and increase efficiency.
• Reduce costs and capitalize on discounts.
• Increase control and visibility.
• Decrease the risk of fraud.
• Improve vendor relationships.
• Increase cash flow, ROI, and improve business scalability.

Conclusion

In today’s digital world, accounts payable automation is becoming an increasingly important tool for businesses of all sizes. By leveraging AI and API integrations, companies can streamline their AP processes and improve efficiency while reducing costs.

As such, AP automation is quickly becoming one of the most popular trends in business finance today. With its myriad of benefits, it is easy to see why AP automation has become an indispensable tool for modern-day finance departments.

Expect these trends to continue throughout 2023 and beyond.

Dani Lehmer is the Founder and Head Honcho of Dani Digs In.

She is a Quality Assurance Analyst and blogger whose natural curiosity allows her
to dig in (pun intended) to help people build their businesses and satiate curiosity
in regard to data science, analysis, and crypto.

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