As businesses continue to grasp this new normal, adapting to operating remotely has brought to light the inefficiency of many back-office processes that are easily disrupted when a quick shift is required.
Among those inefficiencies is the need to make on-time payments to suppliers, an even more critical responsibility during times of uncertainty when cash flow visibility is paramount. Visibility and predictability around cash flow is important to businesses in any environment, but particularly in the unique circumstances many are facing today.
Identifying current payments challenges
I recently participated in a virtual panel discussion with the Institute of Finance & Management (IOFM) to examine strategies for paying suppliers during times of crisis and uncertainty, like we’re currently experiencing with COVID-19.
Throughout the conversation, the more than 500 attendees uncovered gaps in payment processes and revealed the heightened awareness of electronic payments (e-payments) as a necessity, not a luxury, in order to continue paying suppliers.
Right now, the top payments challenges AP teams report experiencing include the inability to pay suppliers due to operational issues and a spike in supplier inquiries about payment status, just behind concerns about fraud and compliance issues.
Recognizing gaps in the payments process
Many companies are grappling with how to pay their suppliers without sending someone to the office to cut and mail checks or transporting the necessary equipment to do so remotely – both of which are inefficient and prone to error and delayed payments.
One in four organizations have even extended the time it takes to pay suppliers due to cash flow considerations since the onset of COVID-19.
As many suppliers need to accelerate payments to stay afloat, in many cases, even prompt payments are not enough in today’s landscape.
Solving for the needs of suppliers
Fintechs are helping meet the needs of suppliers through lending capabilities that can deliver funds from approved invoices faster and earlier than before.
More than 40 percent of IOFM Virtual Town Hall attendees said they were making more than half of their payments via paper check prior to COVID-19.
Now, that percentage has decreased to a little over 30 percent of AP teams, indicating a spike in e-payments.
For some suppliers, even on-time payments are not enough to remain successful in today’s unique circumstances. Many suppliers need cash advances to operate efficiently, and fintech solutions are able to facilitate faster cash and lending capabilities. By offering advance payments in preferred payment methods, suppliers have better control of cash flow and access to funds when they need it to continue operating efficiently regardless of unforeseen conditions.
Whether companies need a solution that allows for accelerated payments or simply a solution that gives flexibility and security to pay suppliers on time from any location, AP automation is helping transform processes that were once manual and nearly impossible to conduct remotely to alleviate businesses from the burden of paper and ensure mission critical functions continue uninterrupted.
If you’re interested in learning more about how AP automation and e-payment adoption can help your business to make and receive payments from anywhere, anytime, explore AvidXchange’s accounts payable automation solutions or schedule a live demo today.