“As businesses continue to face a number of challenges and pressures, finance teams are being tasked with finding new ways to drive operating efficiencies and get more control over cash flow,” said Brian Greehan, head of B2B Solutions for Global Payments. “In response, they are prioritizing investments in back-office automation and working with vendors to increase the adoption of digital payments.”
With increasing corporate belt-tightening, finance leaders are focused on boosting the productivity of lean AP teams and taking measures to cut costs. More than half (59%) of finance leaders mentioned doing more with less, 49% cited reducing processing costs, 43% said improving cash flow management ability and 42% wanted better visibility into their current cash position.
Mineral Tree found that close to half of firms wanting to hire, 45%, expect hiring issues, including delays. Adding to the challenges is that 68% of AP work environments are now hybrid or fully remote. That percentage is expected to increase over the next year.
AP automation is providing critical value and remains a top digitization priority. This process allows finance teams to do more with less. Most, 85% saw efficiency gains, with 63% seeing faster and more timely payments. Close to 60% can absorb a growing volume of invoices and payments with the same-sized team.
Almost a quarter of those surveyed by MineralTree, 24%, have reallocated freed-up staff time to other projects. In addition, they are gaining much-needed visibility into cash flow and working capital.
Those just beginning automation were asked what their most digitized AP task was invoice approval and workflows (71%), followed by invoice data capture and coding (66%), payment execution (58%) and payment authorization (58%).
Vendor relationships are playing a growing role in the adoption of AP automation. The pandemic put a lot of focus on the importance of strategic vendor relationships and that sentiment continues to grow. Two-thirds (66%) of finance leaders agree or strongly agree that their vendor relationships have grown in importance.
Vendors continue to rank speed of payment as the top priority in the payment experience but are unhappy with the time it takes to respond to payment inquiries. This remains their top pain point in the customer payment process.
Dissatisfaction amongst vendors may be growing, MineralTree found. Just over half (52%) feel that AP follows up on payment inquiries in a timely manner, compared to 56% last year.
Currently, only 20% of businesses have fully automated their AP processes, creating ample opportunity for businesses to evolve their processes in order to remain competitive.
In addition to these key themes, the report offers guidance every business can take to optimize their payment operations. Businesses that begin to automate can focus on immediate wins that deliver ROI, such as digitizing paper invoices and automating approval routing. Those who have automated some aspects of their AP workflow can realize even better results by automating additional elements, such as vendor payments. End-to-end automation increases operational efficiencies, enables more timely payments and improves cash flow management.
By using managed payment services to remove some of the upfront administrative requirements, MineralTree said that companies can more quickly enroll vendors for virtual card payments and accelerate ROI from automation. Analyzing invoice and payment data can help businesses identify opportunities to reduce spend and maximize cash flow by consolidating vendors, timing payments and taking better advantage of early payment discounts.