When and how much a business gets paid can determine whether it will survive.
But it is the technical architecture around that payment that can set a business up for success.
“The world of business today is moving super-fast, and that certainly applies to the realm of accounts payable (AP) and accounts receivable (AR),” Nathan Bhatt, vice president of B2B products and partnerships at American Express, told PYMNTS.
“Business decisions need to be made instantly, finances need to be balanced quickly and accurately, and dozens if not thousands of payments per business need to go out the door every day, along with being tracked and organized,” Bhatt said.
Not only does managing regular money-in and money-out movements require a lot of time and resources to get right, but any errors or delays in the AP or AR processes can cause serious issues for businesses as well as their commercial partners.
Fortunately, the pace of technological change is accelerating just as fast — if not faster — than the business landscape.
“Research shows that automating accounts payable processes can save finance teams on average 9.9 hours per week,” Bhatt said. “That’s over 500 hours per year, which represents a huge saving for business leaders — especially those looking to juggle a huge set of priorities while trying to focus on what matters: growing their business.”
“Adopting automated AP solutions helps businesses accomplish more, more efficiently,” he added.
Traditional AP processes, laden with manual tasks such as writing paper checks and reconciling payments, are increasingly viewed as inefficient and error-prone considering modern automated approaches that can enhance business planning and accelerate performance.
Today’s organizations are looking to send money in simpler, faster ways that can be reconciled quickly and accurately.
“It all adds up to better cash flow management, increased efficiency, and ultimately tangible cost savings back to the business,” Bhatt said.
Still, “there remains a lot of manual processes and systems in the industry today,” he noted.
Businesses are still spending time writing paper checks, mailing them out, and waiting for them to be cashed and reconciled, then ultimately closed out.
“It’s a lot of steps and a lot of opportunities for errors along the way,” Bhatt said. “Whereas automated AP solutions remove all these bottlenecks and friction points while providing real-time visibility into finances.”
It is important to remember that there are two sides to every commercial transaction — buyers and suppliers — and Bhatt said automated AP programs can “bring value to both parties.”
Still, an object at rest stays at rest, and that holds true for businesses. Inertia within institutions can hinder the adoption of new technology.
To overcome this, businesses should first identify their pain points and objectives, Bhatt said.
Solutions in the market cater to different needs, so understanding these needs is crucial in selecting the right solution.
Additionally, implementing modern AP automation solutions is becoming more accessible and cost-effective, making it easier for businesses of all sizes to embrace innovation.
“Now is the time to jump in and take advantage of the innovation that’s at the disposal for small businesses,” said Bhatt, noting that according to research, 68% of U.S. businesses plan to start automating their payment processes this year — up from 56% last year.
And for those businesses looking to integrate AP automation with their enterprise resource planning (ERP) systems as part of a digital transformation overhaul, Bhatt emphasized that businesses should not have to switch software systems to benefit from payments automation solutions.
Large companies can solve these problems with customized platforms in partnership with financial service providers, and now, through embedded payments, small- and mid-sized companies also don’t have to switch their software systems in order to benefit.
Still, he said, “it’s not just about automating and gaining efficiency, but also looking ahead to how can you truly optimize your business performance by leveraging the technology that AP automation solutions provide.”
To stay competitive, businesses need to leverage data and continually optimize their processes.
Automation provides greater visibility over cash flow, reduces manual errors and facilitates data security, all while providing businesses with the tools they need to grow.
It is becoming increasingly clear that the future of commercial payments innovation lies in seamlessly integrating systems, processes and platforms through smart technology, ultimately striving for touchless B2B transactions.
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