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Accounts Payable Trends and Predictions for 2017

Webinar Transcription

Hi. My name is Henry Ijams. For the past 15 years, I’ve been studying and helping companies by consulting in accounts payable, purchase to pay and electronic invoice management. It’s a very exciting time to be in accounts payable automation because all the tools are in place. All the technology is there and, even better, service providers are combining the automation elements with third party outsourced services. So, no longer do accounts payable managers, controllers and CFOs need to be worried about the paper-based processes inside of their businesses, but can let somebody else do the work. The best part is it saves them money. What I’m most intrigued with, in 2017, is how ubiquitous it’s starting to become. Sort of like online banking has become so common with how we do business today and how we use mobile devices to do what we considered would’ve been very difficult few years ago. Today, what’s the weather out? Well, I can find out in two seconds. And it’s the same with the next generation that we see with accounts payable automation.

The most important disruption that I see in accounts payable is that it’s no longer about invoice or bill automation, but it has to be about invoice and pay automation combined. Many more organizations today are realizing that it’s best done with a third party. And so the first party you might think of is a bank. Banks do electronic payments, don’t they? The reality is that many banks have electronic payment platforms for consumers. For most of us, this is how we pay many of our bills. But they haven’t developed a lot of tools for how businesses can pay their bills. And so, many more banks in 2017 will be partnering with companies like AvidXchange to deliver this next generation payables automation through their distributed platform, and combine them with the banking services that they already offer.

What are some of the challenges in accounts payable that need to be addressed in 2017? What are the opportunities? The way we see it, there’s really three opportunities. The first one is the most important for you because it has to do with where you’re spending most of your dollars. Free up some of your time. Time is so precious in organizations today, and especially as the economy’s growing. You have to answer the question, how are you using that time most effectively? If you still have your team working on lots of paper-based processes, it means that they’re doing jobs that aren’t very efficient or effective for them. So, what are you gonna do to free up their time so they can do more value added activities in your organization?

The second one is, what are you doing to improve your margins? With the economy growing, you have two opportunities. One, to increase your revenues by capturing new sources of customers, and so how is your team gonna play into that? The second is, how are you gonna improve your margins? What are you gonna do to lower your costs? And using your team, your team that has the knowledge and empowerment of the organization, what can they be doing better inside? The last one is on fraud. This is an emerging problem and one that we’ll see more of in 2017. But as more processes move electronically, the fraudsters, in all kinds of flavors and forms, are trying to figure out how to game our systems. Increasingly, we know that paper checks are, well, susceptible to fraud. And increasingly, banks are trying to protect against this but, well, the fraudsters have too much money, especially in B-to-B where the check values are larger. They’re a very attractive candidate for the fraudsters to go out and figure out how to steal that money. You know, as we move to electronic, the fraudsters are realizing, “Hey, there’s an even better opportunity.” And so what we’re recommending for organizations is to think about using third parties, like banks and others, who can help control the process using their existing control infrastructure because, well, we need more than one eye on the pot to keep an eye on where the money’s flowing.

Forbes has reported that the majority of finance will be automated in 2017. What does this mean for all sizes of companies? Well, Forbes’ prediction is mainly based on the very large organizations, the enterprise-size companies. But it does mean one thing for the medium and small organizations, that you can take advantage and get there faster. So there’s three key themes we think about here. One, the big companies have worked on improving visibility to the accounts payable process. By eliminating paper and making it electronic, we have anywhere access to the information. For the next piece, we think about improving control of the process. When a vendor calls, “Where is my invoice?” no longer do we have to go to paper files. We can get right to it electronically, through the mobile or the web-based interface. Lastly, how do we do it faster? The big companies, it took them years to automate their purchasing in payables process. For the medium size, and what this means that AvidXchange delivers, because we’ve done it for literally thousands of companies, we can do it in 45 days or less. The technology is now so well developed, and our integrations to the hundreds of accounting systems and a very well-managed implementation process means faster speed to value for companies that take advantage of automation today.

What are some of the signs that you should look for to know you’re ready to automate in 2017? The first thing I think about is, are you gonna be growing? And if you’re going to be growing, what are you gonna do to improve your business process to get ready for that growth? The next question you need to ask yourself is, do you have remote employees or field offices, remote locations where invoices are coming in and need to be sent into a central operation? Those are the kinds of businesses that struggle with existing accounts payable processes because it’s very difficult to control the paper when it’s not in one central location. The last question you have to ask yourself is, what are my employees used to? Think about the way we do business today. Everything we do literally has an online component, and even more, it typically has a mobile component. Are you giving your employees the most efficient ways to do their job the most effectively? And that means, well, giving it to them in ways that they can consume anywhere, anyhow, anytime. Don’t you wanna move away from spreadsheets? Don’t you wanna move away from signatures on checks? Don’t you wanna move away from signatures on invoices? This is the opportunity that organizations have in 2017.

As big data becomes even more important in 2017, how does that impact accounts payable and your finance operation? Well, it’s pretty simple. If we think about the ways that we have our accounting systems and all the powerful data that are inside of our general ledger and accounting systems, how are we using that data? What we’re seeing is an opportunity for a way that you can improve your interactions with your suppliers. You have a lot of information about them. They wanna do business electronically with you, but you’re not marrying those two. It’s no longer just about how you’re gonna pay your bills, but it’s how you’re gonna pay them and use data that’s inside of your systems to pay the most efficiently. What AvidXchange is doing with big data is using the data that we have about the 300,000 suppliers to bring that to our customer base, to say, “This supplier would prefer to be paid in this method. This supplier can provide an electronic invoice. This supplier already knows how to send invoices using into AvidXchange.” That’s how you can leverage big data in 2017.

Many might think of Charlotte as a financial services town with our big banks. Well, that’s our legacy. What we see emerging out of that is a really fast-growing and very vibrant technology sector, not just in financial services. We’re seeing a lot of startups come here, a lot of international businesses moving here because of our airport, access to services and, probably most important, our access and continuing growth of the talent pool. And that exciting culture is attracting a lot of really, very exciting companies and people to work in those businesses.

Interested in learning more from an AP Automation expert?
Hosted By:
Henry Ijams
Henry Ijams, Vice President of Supplier Solutions at AvidXchange