7 accounts payable trends you can’t ignore In 2022.
Technology and innovation have drastically changed business practices over the last decade or so. Nowadays, digitization is no longer a fringe concept, but a best practice. With that, all aspects of businesses should begin a shift towards hybrid or fully digital workflows and solutions — finance included.
Accounts payable (AP) is a crucial part of effective business finance. It ensures that companies are efficiently managing the money that goes out, pushing payments to suppliers, employees, and other partners in an orderly manner. In the past, AP practices included a lot of manual processes, paperwork, and resources to run smoothly.
There’s mass digitization of accounting practices, making AP trends in 2022 an important factor to watch out for. When you stay up to date on these changes and improvements, you can streamline finance practices in your business and help stay competitive in today’s fast-changing business environment.
Trends for accounts payable software and practices.
The challenge with technology today is that it never stays still. Every year, software systems evolve as new features come out and the capabilities of tech increase. So being aware of these changes will help keep a finance department and, ultimately, a company stay ahead of the curve.
Here are seven AP software and system trends to keep an eye on in 2022, and beyond.
1. Automation in accounts payable will grow.
A quick look at AP automation trends shows that software will help take over many tasks for accounting personnel and teams. The following are a few of the tasks that people can now automate with AP software:
- Populating forms.
- Managing incoming invoices.
- Invoice validation.
- Invoice review and approval processes. Some AP software, for instance, can now push SMS and email notifications for faster approval.
- Record keeping.
- Invoice and payment reminders.
2. A Demand for cloud-based solutions.
Accounts payable solutions can either come in an on-premise or cloud-based format. The main difference between these two kinds of software is that cloud-based operates online, making it possible for staff to access dashboards and backends from anywhere.
Using cloud-based solutions also makes it easier to integrate an AP software with other software, which leads to the next trend to look out for in AP systems and software.
3. Integrations will streamline collaboration.
Integrations make collaboration within teams, departments, and organizations more efficient. Particularly, an integration with an enterprise resource planning (ERP) software can help get accounting and AP teams to collaborate faster with other sectors of company operations. The ERP industry will be worth over $86.30 billion by 2027 with a CAGR of 9.8%, showing that businesses see its value.
There are many benefits of enterprise resource planning software to the overall operation. For example, AP can coordinate with manufacturing to better streamline raw materials procurement. The same is true for marketing and sales teams to pay affiliate partners and partner agencies with more efficiency.
4. Remote work will change finance and AP.
The future of work looks more and more like a remote or hybrid environment. Hence, the future of CFO roles will hinge on how quickly they adapt to remote work settings. More employees are deciding, or being encouraged, to stay partially or fully remote even after the COVID-19 pandemic ends.
Finance officers and accounting managers should therefore understand how to use software that makes remote work possible. If they are to ask their teams to use these tools to remain relevant in these times, the buck starts with leaders.
5. A growing need for better data security.
There’s no denying that cyber crime is a prevalent threat in today’s world. But that shouldn’t discourage any company from adapting to digital systems and operations. Instead, it should point us towards better data security practices.
Looking at AP market trends, it’s encouraging to see that security has improved drastically.
Therefore, companies should stick with AP software that has the most basic levels of security — two-factor authentication, multiple approvals, and KYC processes. It’s also crucial that companies train their finance teams in cybersecurity practices to avoid fraud and scams.
6. Using AP in data and analytics.
Accounts payable and finance departments will also see better improvement in finance management by gaining access to data and analytics. With automated reports and dashboards, accountants and finance staff can get a better screenshot of cash flow to spot areas of improvement and opportunity. For example, automated data crunching can break down travel and expense management and see how much field staff spend per line item and category, and set policies in place to avoid any unauthorized expenditures.
7. Fintech will fast-track digital payment.
More accounting systems are improving with fintech coming into the picture. Companies can now pay suppliers with ease through wire transfers and various other payment options. It also reduces costs associated with manual payments, like bank check printing, paying for bank messengers, and so on.
Being able to use other payment channels for payroll software and AP systems, such as e-wallets, will also provide employees and partners with other payment channels. Finance technology will only improve with time and mobile payments also push the limits of B2B transactions as much as it does for B2C.
How digital AP is changing the landscape.
It helps to know why staying up to date with AP software benefits a company. So let’s look at how digital AP is revolutionizing the way finance departments and personnel operate, and what benefits they bring to the organization and their accounting and finance teams.
Digitizing AP puts necessary checks and balances to minimize or reduce any errors in payments. This benefit helps companies control their deadweight losses to human errors in payment processes. Moreover, it improves relations with employees and partners. Underpayment and overpayment of accounts payables and salaries to suppliers and staff leads to an increase in mistrust and misunderstanding. Addressing these errors will be a great help to internal and external relationships to ensure that the business continues to work with the right partners for the long term.
Faster processing times.
91% of accountants admit that tools have helped their work productivity. In turn, it’s not just their work quality that improves by reducing errors, but also the speed at which accounts payables get completed. Automation helps existing staff finish tasks faster and send payments out sooner than they would if they focused on manual processes. Speed also plays a big factor in giving accounting and finance staff more time to evaluate expenditures and spot ways for the company to save resources — an obligation that often gets missed out because employees are too busy playing catch-up with accounts payables.
Accounts payable software costs money, especially when companies want the best solutions to meet their needs. But the productivity it brings can offset that cost, making it an investment and not an expense. And in finance, one foundational principle is that money spent that helps save or earn more money is always a good business decision.
Digitization in finance.
Digitization plays a crucial part in the future of AP and other financial practices. And companies who want to streamline their cash flow management, and stay financially healthy for many years to come, should start prioritizing software integration into their accounting workflows.
Find out how Airbase fits in with today’s digitization trends. Schedule a demo today!
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.
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