The Future of AP Automation: Top Trends and Innovations
As companies look to modernize their finance function, Accounts Payable departments have become leaders in adopting automation and process optimization to reduce overhead. From improved approval workflows to vendor relationship management, many innovative solutions have emerged to help AP departments gain efficiency.
This blog explores some of the key trends and innovations that are influencing the way businesses manage operations, and looks at changes on the horizon.
The rise of advanced analytics and artificial intelligence
One of the most prominent trends shaping the future of AP automation is the growing adoption of advanced analytics tools and artificial intelligence (AI) to guide business decisions. While finance teams have long championed data-led decision-making and forecasting, recent innovations in machine learning and AI will enable businesses to extract more insights from large datasets, and predict future performance with a higher degree of accuracy.
AI is being used to optimize invoice processing, identify errors, and forecast future cash flow. Many companies already use optical character recognition (OCR) to capture invoices, extract data from them, and populate it into an AP automation solution. High-performing teams are also using AI to lower their operational overhead and set up pre-approval rules for outgoing payments, and create sophisticated systems for error detection and prevention.
When it comes to advanced analytics, industry-wide innovations have enabled companies to take a much more detailed look at their AP departments, and track more metrics than they have in the past. Some of these key metrics include:
- Invoice processing costs
- Average payment processing time
- Error or exception rates
- Number of payments processed per employee
With this added visibility, companies can make more informed decisions about their AP processes and manage their financial performance with ease.
Financial management on the go
As with most business functions, AP departments have rapidly adopted remote work best practices over the past few years. One telling indication is the rise of mobile approval workflows to manage vendors and transactions. These solutions empower teams to perform their tasks away from their desks – whether to approve invoices, track payments, or access financial data.
AP solutions prioritize a user-friendly mobile experience, and have a direct connection to the underlying ERP thanks to connected models such as Microsoft’s Dataverse. These offerings are further enhanced with low-code applications that provide customization and flexibility, enabling companies to meet their users’ specific needs. Mobile-enabled AP automation also increases agility and responsiveness – employees can quickly review and respond to invoices and payment approval requests, minimizing workflow delays.
Collaboration and productivity
Another result of adopting cloud-based solutions is improved collaboration and a focus on team wide productivity. In the context of Accounts Payable, this collaboration extends outside of the finance team to include vendors and other stakeholders involved in the revenue cycle.
One of the key benefits of collaboration is the ability to centralize communication and document management throughout the AP process. By providing a unified platform to exchange information, businesses can eliminate silos, reduce errors, and improve the transparency of their AP function. Collaboration tools that empower teams to work asynchronously also allow each individual to maximize their productivity and work in a way that suits them. Rather than requiring every team member to complete their tasks in the same way, these tools help companies to be more creative in managing their finance departments.
Finally, collaboration tools promote better vendor relationships by facilitating timely communication and more efficient issue resolution. By providing vendors with access to tools such as self-service portals and automated notifications, businesses can improve their vendors’ satisfaction rate and create more sustainable relationships with them.
Security and compliance
AP departments encounter many security and compliance challenges that jeopardize the integrity of the finance function. Chief among these is the risk of fraud – from a single fraudulent invoice to sophisticated cyberattacks that may result in significant losses.
Security vulnerabilities may not be obvious at first glance. For example, if an organization implements an AP automation solution that is not directly embedded into their ERP, they may fall victim to broken integrations, system downtimes, or glitches that lead to a breach. This can have ramifications that extend beyond the initial cost of addressing the breach as 87% of consumers say they wouldn’t purchase from a company with weak security systems.
A popular method to minimize the risk of fraud and bolster security is to partner with a third-party payment provider. In this model, external teams with strong financial controls and extensive training are supported by advanced automation software to make vendor payments a breeze for their customers. This also helps eliminate the risk of noncompliance while generating rebates that can cover the full cost of processing the payments.
Choosing the right solution for your business
As businesses navigate the complex landscape of AP automation, it is crucial to select a solution that aligns with their unique business model and requirements. This helps ensure that the chosen AP automation solution integrates with existing processes, addresses key pain points, and enhances overall operational efficiency.
At Mekorma, we understand the importance of finding the right AP automation solution for your business. Our solutions are designed to streamline AP processes within Dynamics 365 Business Central, Dynamics GP, and Acumatica, offering a seamless and efficient way to manage your finance function.
Explore our comprehensive set of solutions for AP automation today to discover how we can help optimize your AP processes.
