In 2013, Business Insider suggested that paper checks could disappear completely by 2026. We might not be at that point yet, but B2B payments and accounts payable (AP) automation have made tremendous advances over the past decade.
AP departments use automation to read and enter invoices, apply rules and workflows, collect approvals, and, of course, make payments. AP automation providers also integrate with accounting software and other fin-tech solutions for heightened efficiency, visibility, and transparency, offering better control over business cash flows.
But that’s just the beginning.
For the future of AP automation solutions, here are 5 key payable trends to watch.
Top 5 AP automation trends to watch
1. Savvy AP teams will track (and crush) their KPIs
Finance teams have always tracked KPIs to measure their companies’ financial health. Today’s tech-savvy CFOs are turning that lens around to optimize their own operations.
By tracking 11 key metrics across AP processes—as well as other back-office financial services—finance teams are identifying time-consuming bottlenecks they can streamline to reduce costs and boost efficiency.
Accounts payable automation solutions will continue to support that effort, providing visibility into the data behind the metrics and giving teams with automated payment processes a strategic edge.
2. Millennials and Gen Z will drive efficiency and scalability
According to Forbes, remote work will continue to expand after picking up speed during the pandemic. Because the efficiency gains of AP automation apply equally to remote, in-office, and hybrid teams, automation software gives finance teams the flexibility they need to adjust operations in response to the employment market.
Look for automation tech to keep gaining traction in every industry across the board.
Along the same lines, Millennial and Gen Z talent will continue to push for flexible, remote work arrangements, giving AP automation a significant recruiting advantage over traditional systems that don’t allow for alternative work environments.
Finance teams that adopt the technology will streamline operations with a payables process that’s ready to scale, leveraging the tech for every aspect of invoice processing—from data entry to approval routing to electronic payment.
3. Expense management will shift toward spend management
Companies are turning more and more to their finance teams for advice on cash flow management and resource planning, even when that finance team is outsourced.
According to CPA.com President and CEO Erik Asgeirsson, demand for financial client advisory services (CAS) is growing exponentially. “CAS services grew more than 20% YoY and it’s not stopping there. It’s the fastest growing area for accounting firms.”
Because of that phenomenal growth, CAS offerings are already morphing into CAS 2.0, which includes the evolution of expense management into full spend management, moving toward central visibility into 100% of B2B spend.
What is expense management?
Expense management is the traditional way of managing business expenses using a retroactive, department-level approach. The company incurs an expense, and then the invoice is paid and recorded after the fact.
In other words, the work of managing expenses takes place after those expenses happen. Planning takes a back seat to verifying payments and chasing down receipts. It’s time consuming, and it scatters the expense management process across multiple departments.
As a result, businesses don’t have much control over their budgets, and they don’t have meaningful visibility into their real-time spending.
What is spend management?
Spend management is a proactive approach to controlling business cash flows. It leverages new technologies to manage business spend before it happens.
Companies plan their spending ahead of time, setting department-level budgets. Then, they fund those budgets using corporate credit cards with integrated automation software to set predetermined limits.
“Spend management is viewed by finance leaders as the future of expense management,” said Asgeirsson. ”It’s a more strategic sourcing of company funds because it brings all spending into one place for smarter decision-making, compared to expense management which has been historically decentralized by department.”
Why is the shift to spend management so important right now?
Spend management allows for more accurate financial reporting and forecasting against budgets. With today‘s rampant inflation and supply chain challenges plaguing procurement, finance teams are actively seeking ways to tighten their control over cash flow.
Look for AP automation to work hand-in-hand with spend management systems, filling a marketplace gap by providing insight into 100% of B2B spend.
4. Cybersecurity and AI will focus on mitigating human vulnerability
Psychologist John Eastwood, PhD, is known for concocting experiments around what might be the least studied of all human mental states— boredom. Although many of his findings are oddly intriguing, at least one isn’t surprising at all: mundane tasks are highly prone to human error.
“When people are bored they're more likely to make performance errors,” Eastwood commented. “That's a big deal if you're an air-traffic controller.”
It’s a big deal to finance teams too. Mistakes might not be deadly in your average accounts payable department, but they have the potential to cost a company a small fortune.
AP automation software already applies artificial intelligence to read and enter data from invoices, while machine learning comes to recognize the way recurring invoices are presented. This lets computers check details that human operators could easily miss.
Did the address on that invoice suddenly change this month? Is the invoice number a duplicate? Most people gloss over repetitive information, seeing only what they expect to see. The phenomenon is known as change blindness, and the boredom of routine tasks only makes it more likely.
Fortunately, computers don’t suffer from the same problem.
With phishing and other scams on the rise, look for the AI in AP automation to get even better at spotting red flags. Expanded error checking routines and notifications will help finance teams catch mistakes and potential fraud during the invoice intake process, long before any money goes out the door.
5. Integrations and APIs will take efficiency to new levels
Leading AP automation platforms already integrate with major accounting software and ERP systems, bringing tremendous efficiencies to the AP process. Information from an invoice is entered just once, flowing automatically through the payment process and keeping accounting software up to date.
AI can even help human operators enter that data by reading it in for review, further reducing the chance of human error while making the process of data capture faster than ever.
Still, accounting software integration is only the first step in the evolution of AP (and AR) process automation. Business finance workflows are now poised to enter the next stage of digital transformation—fully integrated end-to-end solutions for every aspect of business finance operations.
From payables to receivables, from electronic payments to e-invoicing to business credit cards that come with integrated software, fin-tech companies are working hard to make manual processes a thing of the past for accounting and finance teams.
Look for new integrations to create all-in-one turnkey fin-tech solutions, as well as developer programs and APIs that let businesses extend those integrations throughout their operations.
Bottom line: tech-minded CFOs will widen their strategic growth advantage
Successful startups rarely follow a linear growth pattern. They might take a while to get to that first million in revenue, but after that, growth can speed up, even exponentially.
One of the biggest challenges for CFOs and finance teams is keeping up with the related increase in financial processes and complexity:
Billing questions & errors
New vendor contracts & terms
Outstanding invoices & payments
Monthly transaction volume
CFOs who put a complete fin-tech stack in place early can stay ahead of the game with workflows that are ready to scale.
Instead of spending all their time wrangling the growth of day-to-day operations, tech-minded CFOs can spend more hours on strategic initiatives—like managing cash flow and securing financing for expanding operations.
The future of AP automation
Bill.com is used by more businesses to automate payables and receivables than any other platform. By acquiring Divvy, a leader in spend management, and Invoice2go, a leading mobile-first AR software provider, Bill.com is driving the future of AP automation toward a single-source fin-tech stack solution.
To see how Bill.com could help you reduce time spent on AP and AR, improve efficiency, speed up your monthly close, and enhance your team’s performance in other key metrics, sign up for a demo today.