Digitizing A/P is still very much on the minds of your peers, who are prioritizing control of cash flow over business growth as organizations face economic uncertainty and rising inflation.
A survey of 821 finance pros, as well as 246 employees at their vendor partner organizations, by fintech software provider MineralTree concluded that the top-five wish list for automation in Finance is as follows:
MineralTree’s latest State of A/P Report also noted that businesses are continuing to make strides in digitizing A/P processes, even though fewer respondents claim to have automated compared with last year (possibly due to budget constraints). Over half of respondents (51.6%) said that they’ve automated at least some of their A/P tasks, and 18.5% said that they’ve fully automated their A/P processes.
The reasons for the investment? In addition to AI- and machine learning-powered efficiencies that enable consistent, on-time payments, A/P automation can offer dashboards that provide real-time visibility into cash flow and working capital, and a better understanding of spending patterns. Modern fintech also provides Finance choices for payment timing – either to massage cash flow or take advantage of early payment discounts.
In addition, digitizing A/P saves money on postage because mailing checks is less necessary and saves money on labor because the tech takes care of the manual tasks.
In fact, the top drivers of digitization of A/P at companies right now, according to the report, are:
- Doing more with less in Finance, e.g., lack of qualified talent, reducing headcount (58.8%)
- Reducing processing costs (49.1%)
- Managing cash flow efficiently, e.g., extending days payable outstanding (43.1%), and
- Gaining better visibility into current cash position (42.3%).
Digitizing A/P to solve vendor pain points
With two-thirds (66.2%) of finance leaders reporting that their vendor relationships have grown in importance, vendor dissatisfaction needs to be minimized.
Data shows that vendor dissatisfaction may also be a key driver of A/P digital transformation. Just over half (52.3%) of vendors feel that A/P follows up on payment inquiries in a timely manner, compared to 55.5% that responded that way last year.
Vendors ranked speed of payment as their top priority in the payment experience, followed closely by accurate payment.
Digitizing A/P can solve both, helping businesses improve communication with their suppliers and enabling fast electronic payments. Seventy-nine percent of vendors want to receive more payments digitally, and 76% of vendors believe that when buyers pay electronically, they’re more likely to pay on time.
Considerations for your digitization strategy
If you’re considering digitizing A/P processes, there are a number of factors to consider, such as:
- the size and complexity of your business
- your budget, and
- your IT resources.
To get more detailed insights on improving your A/P process and the latest trends in A/P automation, check out the free ResourcefulFinancePro on-demand workshop “2023 State of AP: Key Learnings for 2024.”
