CEOs, Finance Staff On Opposite Sides Of The Accounts Payable Fence

B2B FinTech solution providers are currently working on reducing the friction associated with implementing their solutions into enterprise back offices. As they do this, there are challenges over which these providers have less power. One of the biggest hurdles in B2B FinTech adoption and digital transformation is convincing the higher-ups that such investments are necessary.

A new report from Software-as-a-Service (SaaS) firm Inspyrus suggested that chief executive officers and accounts payable (AP) professionals aren’t seeing eye to eye on AP technology, and organizations are failing to upgrade their AP processes and tools as a result. In its “2018 Payables Insight Report,” researchers at PayStream Advisors surveyed more than 400 professionals across North America to assess their views on their firms’ accounts payable operations. In a statement announcing the findings, Inspyrus Chief Strategy Officer Chris Preston described the results as “eye-opening.”

“There is a vast gap in perception between C-Suite executives versus AP staffers who have hands-on experience doing the work of AP processes, and it appears top executives are clearly far removed — if not out of touch — with the day-to-day challenges in the world of the AP professional,” Preston said.

Ninety-three percent of accounts payable professionals surveyed said faults exist in their AP processes. Yet, about half of top executives — like CEOs, founders, presidents and other members of the C-Suite — said their firms’ AP processes “work just fine.”

AP executives who reported that their firms have not made an investment to fully automate accounts payable processes said manual data entry is their biggest pain point, as more than half of these professionals cited struggling with manually entering invoice data into AP systems. Paper-based processes, lost invoices and manual invoice routing for approval are also top areas of friction.

According to Inspyrus, these pain points are among the biggest reasons why businesses are missing out on early payment discounts. AP professionals said the length of time it takes to approve invoices for payment, as well as the friction linked to invoice exceptions and errors, mean their firms are missing out on not only streamlined AP processes, but opportunities to turn accounts payable into a profit center via early payment discounts.

“Organizations can literally save millions through a combination of efficiency gains, cost savings and cash-back returns that come with combining invoice automation, payment automation and dynamic discounting — along with direct supplier enablement,” continued Preston. “However, complacency around the AP function threatens to hold organizations back from attaining these breakthrough automation efficiencies and financial returns.”

The complacency appears to be coming from the C-Suite, the survey found. According to Preston, these executives’ assumptions that accounts payable operations are “fine” mean that AP departments are overlooked when the C-Suite considers where to place key investments in their firms’ digital transformation.

In the survey, accounts payable professionals were vocal about the benefits they’ve witnessed when their firms do embrace AP automation solutions. For example, the vast majority said there is noticeable improvement when ePayables capabilities are adopted, with two-thirds citing a reduction in paper invoice volume and most reporting faster invoice approval.

Adoption of electronic payments and commercial card programs also yields increased convenience, with most reporting access to rebates and incentives. Half said ePayments and commercial cards lowered processing costs, another area of cost savings for the enterprise.

“Depending on how much spend is captured using commercial cards, the research noted that rebates can potentially bring companies millions of dollars in savings — in many cases, covering the cost of payables solutions,” Inspyrus said in its announcement.

However, without upper management’s acknowledgement and understanding of these benefits, AP automation will remain unachieved, the report suggested. There may be a lack of communication and education among C-level executives when it comes to accounts payable technology, as well as the potential benefits of automation, which must be addressed.