Why 2021 is the year to digitize accounts payable operations
There is no question that 2020 was a year of disruption for everyone on both a personal and professional level. On the business front, the work-from-home mandate during the quarantine exposed weaknesses in business operations that caused many companies to scramble and look for workarounds. Organizations with paper-based accounts payable (AP) operations were particularly hard hit. While manual processing has always been time-consuming and problematic, it quickly became untenable during the pandemic. AP staff had to go into the office, look through the mail – and sometimes on colleagues’ desks – for invoices, and then physically route them to reviewers who in turn sent them back to AP for processing. It was costly, inefficient, and a huge waste of time.
These stresses on the system, and the realization that a modern organization cannot afford to run an archaic, manual AP process, are making management receptive to tech investments and are driving AP automation. According to the Institute of Financial Management (IOFM) Effectiveness Benchmark Report 2020, AP automation increased from 66% in 2019, to 73% in 2020, and we expect to see it grow at a faster pace in 2021.
There are four other major tech trends converging to further AP digitization in 2021:
- The increased push for hyperautomation. One of Gartner’s key tech trends for 2021 is hyperautomation, or automating as many processes as possible in an organization. With modern AP tools, the level of automation can be continually improved, no matter where you are in the AP journey. For example, the ultimate goal for AP automation is to get rid of paper and strive for touchless, straight-through automation, where no human intervention is needed – speeding up the approvalprocess, reducing errors, and avoiding late payments and associated costs, among other benefits. Advanced solutions can automatically select accounts, cost centers and approval workflows and match invoices to POs and goods received. In other words, they are doing as much work as possible. That enables greater efficiency and also frees up the time of AP professionals so they can focus on value-added activities such as financial analysis, cash flow management, and serving internal and external stakeholders at a higher level.
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