Every business aspires to have a healthy cash flow and become profitable. There are several reasons why a company’s cash flow dips into the negative. One of the common reasons is that the accounts’ payable function is not being managed optimally.
In this blog, we delve into key challenges faced in the accounts payable function, and the rising trends in accounts payable that can help business schemes accelerate accounts payable transformation.
Despite digital transformation impacting every sector and function, several businesses still use manual, paper-based processes to manage their accounts payable. This status quo results in the following common challenges:
All these challenges, collectively, lead to a company’s cash flow being adversely affected.
Here is a snapshot of rising trends in accounts payable, which are transforming this key business function:
The future of accounts payable management will witness a significant shift from manually managing accounts payable to leveraging tech-enabled accounts payable software. This shift will bring more efficiency and transparency to accounts payables.
The usage of Artificial Intelligence (AI) will power the automation of accounts payable processes. For instance, it will drive invoice processing efficiency and enable balance sheet forecasts via access to data.
It can also support businesses in an important area – compliance issues – by automating fraud detection in invoicing and other areas, through pattern identification. AI will thus play a pivotal role in accounts payable transformation.
Access to technology is powering valuable data insights that businesses can use to help them function more efficiently. Businesses can customize dashboards and get access to specific data.
For instance, within a few clicks, it is easy for a business to evaluable payment patterns for a specific period. Businesses can also ensure that there are no data leakages and duplications and that all data is accounted for.
Implementation of blockchain on accounts payable will make this function much more transparent. Blockchain ensures a single version of the truth. It reduces the potential for any kind of fraud without immediate intimation from all the relevant stakeholders.
One of the biggest benefits of mobile invoicing is that payments can be made and acknowledged instantly. Accounts payable executives will no longer need to chase businesses for invoices, or confirmation of payments.
With the arrival of innovative payment solutions, businesses can make payments in a safe, secure, manner. Payments can become automated, instant, location-agnostic, and transparent.
Accounts payable automation enables teams to collaborate seamlessly with their remote team members. Since all data is securely stored on the cloud, it can be retrieved from anywhere, at any time.
This potential gives businesses a chance to take advantage of the benefits of hybrid and remote work modes.
The evolution of payment technology has enabled businesses to reduce the very expenses traditionally experienced with paper payments, and overseas payments.
Businesses can also choose and plan their payments based on their payment mode of choice. For instance, a business may prefer to make all payments using a credit card which improves their credit will enough. The evolution of payment technology is often the power of choice.
An efficient accounts payable function enables businesses to drive business growth due to several outcomes. It helps them improve their credit scores, reduces financial fraud liabilities, allows them to improve their cash flows, and prevents overpayment.
Businesses can leverage the excess cash to plan better, invest it back into the business, and drive growth.
Technology-led accounts payable trends are expected to make the account payable function more agile. However, companies do not necessarily have the know-how to make such a shift. Instead, they can consider partnering with one of the top accounts payable outsourcing companies, early on. Such specialists offer businesses a combination of accounting expertise and superior usage of technology to bring in efficiency and drive profitability to the business.
OHI is a specialized finance and accounting outsourcing service provider since 2006, providing skilled and experienced accounts payable specialists at economical rates. High expertise in QuickBooks, Xero, NetSute, Yardi (Genesis and Voyager), AppFolio, Timberline and Microsoft Dynamics. Our services are used by 300+ businesses across sectors like real estate, construction, logistics & transportation, retail, manufacturing, IT firms and CPA firms.
Contact us for a customized NO OBLIGATION proposal for outsourcing your accounting activities.