Doing more with less: execution excellence with Accounts Payable automation

November 3, 2023 | 7 minute read

Key takeaways

  • Accounts Payable teams face a heightened challenge of underinvestment hindering the automation required for best practice.
  • Trusted partnerships offer cost-effective opportunities to strengthen supplier relationships and communication while augmenting technology to reduce mundane service tasks.
  • A comprehensive digital network of suppliers offers day-one automation to enhance supply chain visibility, streamline payment processes, and increase fraud protection tools.

Inflation in many countries has reached generational highs leading to interest rates rising faster and higher than most would have anticipated. Regardless of the short-term trajectory of inflation, we are entering a fundamentally different business environment from the one we have experienced over the past 40 years.

 

Every business is now focused on cost reduction as the price of funding and production inputs rise. Nevertheless, the circumstances of this economic turning point are unique. We are also amid a wave of technological advancements driven by integrated data flows, machine learning and artificial intelligence. This technology is transforming business ecosystems and creating significant opportunities for digitization and automation.

 

In this unique environment, finance functions find themselves under pressure from competing priorities for efficiency, technology investment and cost reduction. Accounts Payable teams are often at the forefront of this challenge to do more with less while balancing day-to-day tasks with strategic goals.

Best practice in Accounts Payable automation

Accounts Payable engages more stakeholders than many finance functions. It also has an outsized impact on supplier relationships as invoices are one of the most regular dataflows between buyers and suppliers.

 

Along with other areas of finance, technology providers are springing up to offer Accounts Payable automation solutions. However, the real challenge is how to transform cost-effectively. This challenge is heightened by the fact that Accounts Payable transformation is often driven by broader finance initiatives. Securing of investment can also be hindered by a perception of Accounts Payable as an “unglamourous” function, or one solely applied to payment technology.

 

In contrast to that perception, best-in-class Accounts Payable functions embrace technology beyond payments to include integrated processes and relationship management. Best-in-class automation starts at the beginning of the procure-to-pay cycle. Electronic data exchange and supplier portals can support straight-through processing of invoices, with clear escalation of payment approvals. Importantly, additional levels of reporting that can give different stakeholders visibility into cash flow, accruals and open payments are becoming the norm – paving the way for more advanced applications of artificial intelligence.

Partnerships as an extension of the payables team

In recent years, partnering with a bank or fintech for Accounts Payable functions has seen a resurgence. Rather than simply handing over the reins to an overseas location, best-in-class organizations are focused on using technology to connect with a trusted partner who acts as an extension of the payables team. This offers closer alignment with in-house functions while augmenting technology at a lower cost, and alleviates the burden of manual, time-consuming processes.     

 

Extending Accounts Payable partnerships to supplier relationship management is an increasingly effective strategy. Partnerships that broaden the current team rather than replacing it can alleviate the burden of routine communication. They also offer immediate access to large, data-rich networks of suppliers and more insights into supplier behaviors and preferences than traditional processes.

Five ways that a partnership can support cost-effective best practices in Account Payable automation

 

  1. Boost supplier support while reducing repetitive service requests. The right service model offers supplier onboarding and servicing, from education on payment acceptance or invoicing processes to self-service and automation of daily queries concerning remittance and reconciliation. In-house resources can focus on strategic relationship interactions.
  2. Automate instantly to reduce buyer and supplier effort. Data-rich supplier networks offer day-one benefits through automated supplier onboarding, flexible payment rails, and continuous automated supplier enablement campaigns that drive supplier adoption for the life of a program.
  3. Leverage robust data tools and protect against fraud. Centralized management of supplier data reduces the risks associated with data storage, validation and auditing. The elimination of paper-based processes facilitates further automation while reducing the risk of fraud.
  4. Enhance visibility and reporting to strengthen integration and communication. Standard reports can be shared with suppliers through data exchange, along with online tools for tracking payments that strengthen supplier relationships and integration.
  5. Use a single interface to centralize disparate payment files. Often an early step in the automation process is the centralization of payment instructions through a single portal and file process. This reduces delays and errors while improving efficiency and facilitating supplier payment optionality

The choice of partner matters where relationships are involved. Bank of America offers best-in-practice solutions that take a comprehensive approach to payments and the role of Accounts Payable. Our network of over 1.3 million suppliers means your team can hit the ground running with secure automation and supplier communication. Our technology investments offer mature, tangible solutions that bring cost benefits that support the Accounts Payable automation business case. (Look out for our future articles where we will delve into the fraud prevention and revenue benefits of a comprehensive approach to accounts payable automation.)

 

Most importantly, we understand that relationship investment is part of any successful business. While we continue to invest in Accounts Payable technology, your teams can focus on strategic initiatives, doing more with less and meeting the challenge of accounts payable excellence. 

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