For the accounts payable (AP) and enterprise resource planning (ERP) automation space, it’s no longer business as usual. Firms looking to strengthen their interactions with customers and vendors by adopting comprehensive, automated AP and ERP solutions are increasingly turning to cloud-based products in lieu of on-premises systems. These firms are finding that managing both systems in the cloud offers the flexibility and security needed to streamline invoicing and cut costs, while keeping operations running as smoothly and accurately as possible.
In the February Next-Gen AP Automation Tracker, PYMNTS highlights how tech-first firms are finding that managing AP in the cloud offers greater insights into the entire invoice-to-payment-to-reconciliation process, essentially transforming the efficiencies of AP departments.
Across The Next-Generation AP Automation Space
Recent research suggests that businesses, including FinTech firms, racing to stay ahead of digital fraudsters’ schemes have further to go. The share of companies reporting fraud experiences jumped to 60 percent this year, according to a survey by Bottomline Technologies and Strategic Treasurer of more than 350 global corporate practitioners and bankers, up from 40 percent in 2017. AP departments are the prime targets of bad actors, and automating AP processes poses a strong defense against criminal breaches. The uptick in fraud, such as the Business Email Compromise, has continued to target areas like bank transactions, despite firms’ increased spending on anti-fraud measures, the survey found.
Cloud computing’s scalability, flexibility and cost-efficiency are facilitating AP automation adoption. Research firm IDC predicted in a recent report that cloud-based financial application demand is outpacing that of on-premises applications. This shift to the cloud is supported by companies of all sizes, but service-centric enterprises specifically lead the way. The report found that the key benefits enticing adopters to the cloud include faster returns on investment, quicker implementation processes and more affordable entry costs.
One of the world’s largest media service providers has jump-started its productivity with a new AP integration, according to recent reports. The company’s solution works with multiple aspects of clients’ media strategies (including branding and communications across multiple channels, analytics, competitive research and creative services), which creates 40,000 monthly invoices on average. That volume meant that the firm struggled with time-consuming invoicing and a lack of transparency under legacy operations, requiring 20 to 30 employees to manually input data into its corporate system. Growth encouraged the media company to switch to automated processes.
For more on these stories and other recent next-gen AP automation developments, read the Tracker’s News & Trends section.
Oracle Bets On Education-Centric Integration Strategy In Cloud Computing Race
Businesses want fast, convenient and cost-effective financial management systems. Many are opting for cloud-based solutions — in fact, research projects that approximately half of businesses will use cloud-based financial management systems by 2022. However, businesses looking to adopt cloud-based ERP solutions can run into a number of logistical, organizational and even social hurdles, which can slow successful integrations into companies’ broader AP operations.
In this month’s feature story, David Haimes, senior director of ERP cloud development for Oracle, explained how businesses can integrate AP solutions into their cloud-based ERP systems to automate payment workflows and reap numerous benefits, starting with the education of AP professionals.
Combining ERP, AP To Power Workflow Automation, Payment Processing
Successful companies know they must be agile and flexible to meet the ever-changing demands of customers, as well as to forge valuable long-term relationships with suppliers and run streamlined operations. Yet, many still ignore AP automation capabilities’ importance when upgrading their ERP software platforms. Some firms are beginning to recognize, however, that combining ERP software and AP automation is a powerful tool to drive business value, enhance working capital management, reduce operational costs and improve productivity.
This month’s Deep Dive explores how speedy cloud-based automation software adoption is promoting healthy business growth.
About The Tracker
The Next-Gen AP Automation Tracker, a PYMNTS and Bottomline Technologies collaboration, is a monthly report that highlights the most recent accounts payable developments and automated solutions disrupting how businesses process invoices, track spending and earn rebates on transactions.
Digital payments are growing in Latin America as companies like Mercado Libre and TerraPay rapidly advance digital banking and digital wallets in the region.
Central bank instant payments mandates and modernized infrastructure in Brazil have also moved the needle to the point where the region is arguably moving faster toward digital transformation than anywhere else in the world.
PYMNTS Intelligence’s “How the World Does Digital” report surveyed 67,000 consumers across 11 different countries. It found that Brazil was far ahead of all of them — including the United States — in digital engagement. Drilling down into the results, in 2023, 66.8% of Brazilians used mobile banking apps on their phones at least once a month, and 46.8% used these apps at least weekly.
Consumers in Brazil are embracing digital payments as well. The report found that by 2023, two-thirds of consumers in Brazil had smartphones and 75% had debit cards. In the same year, 77% of consumers in Brazil were using Pix, the instant payments app for mobile phones launched by the country’s central bank.
“After many decades of the status quo in payments, Latin America is going through a major transformation,” Marcelo Moussalli, managing director and Latin America product head executive at Bank of America, told PYMNTS.
That transformation is being driven by the two largest economies in the region — Brazil and Mexico — representing roughly two-thirds of the total GDP of Latin America, he said. Regulators in those countries launched new payments initiatives aimed at modernizing their respective banking systems.
The top-down, mandate-driven approach has been focused on boosting competition while lowering transaction costs, increasing transaction security and fostering wider financial inclusion. Beyond the commonality of the goals, the governments in Brazil and Mexico took different approaches to get there.
Brazil, for its part, introduced the Pix real-time payments network. Mexico’s innovations have included a peer-to-peer (P2P) network and a digital collection capability underpinned by QR code technology.
“In both countries, these innovations are improving [payments] speed, visibility and the overall user experience,” Moussalli said.
Against that backdrop, the adoption of real-time rails and new payment modalities has, in some cases, exceeded expectations, but there is still a robust greenfield opportunity, he said.
By way of example, in 2020, Pix’s first year, the network captured 16% of Brazil’s electronic payments volumes; that tally has grown to 40% as recently as this year. Mexico’s real-time payments network has grown 6% year on year as measured in 2024, with 60 million individuals using the network, although the QR codes and P2P networks have notched less adoption than originally anticipated.
The trend is inexorable, however. Although some businesses have been hesitant to pivot more fully to these new payment modalities and may cling to traditional methods such as cash, as time goes on, “it’s going to be hard to do business in Mexico or Brazil” without connecting to these rails, Moussalli said.
“They’re going to miss out on opportunities if they don’t adopt new digital payment options,” he said.
That’s especially true in commercial payments, where suppliers will increasingly demand to be paid in real time.
Asked by PYMNTS about how traditional financial institutions can help enterprise clients embrace change, Moussalli said Bank of America launched support for QR codes, which clients can access through the CashPro banking platform. Clients scan codes from paper or electronic invoices, and within seconds the platform retrieves the invoice details from the beneficiary bank and displays those details for review and confirmation of payment.
“This dramatically speeds up the payments process” beyond the confines of paying suppliers and into the realm, for example, of mandatory transactions that companies make for employees’ retirement benefits, Moussalli said. That “helps eliminate bureaucracy in processing payments.”
The feature has been so well-received in Brazil that it is being explored for use in Europe, he said.
Although regulators initially drove innovation in financial services in Brazil and Mexico, the central banks are well connected to their respective markets and are working with banks and merchants to foster the shift to digital transactions, Moussalli said. Cash withdrawals from banks have plummeted in the double digits. There’s particular promise in pivoting to digital payments in Mexico where cash is still tied to 85% of all retail transactions, especially for transactions below the U.S. dollar equivalent of $50.
“The impact of these changes is ongoing,” said Moussalli, adding, “there’s no going back.”