How Accounts Payable can thrive in 2023
The Accounts Payable (AP) landscape is set to undergo some exciting transformations in the coming year. Automation and hyperautomation technologies are becoming increasingly popular, while eInvoicing is gaining traction as its adoption grows worldwide. By keeping up with these trends, businesses can look forward to improved cash flow and supplier relationship management.
Let’s look at how AP can thrive amidst these challenging yet exciting developments.
1. Foster greater cross-department collaboration
AP is a multifaceted powerhouse, providing unprecedented insight into how companies allocate their spending. From working capital management to spend optimization, AP produces tangible value for the enterprise—and that’s just scratching the surface. Unlocking this potential requires strong cross-functional collaboration between departments, including finance, procurement, and treasury so that everyone can benefit from its full capabilities.
2. Play a more significant role in maintaining good supplier relationships
The past years have seen significant disruption to the supply chain—empty shelves and hard-to-get goods are not uncommon anymore. Ensuring invoices are paid on time and accurately is essential in maintaining strong supplier relationships. With suppliers having the power to choose whom they want to do business with, AP’s role has become more crucial than ever.
3. Focus on cash flow and working capital management
In the face of a challenging economic climate, organizations are turning their attention to cash flow and working capital management. Days payable outstanding (DPO) and days sales outstanding (DSO) are scrutinized, leading to increased interest in supply chain financing and working capital management initiatives. With all that is happening, invoice approval times and payment terms are becoming crucial. The expectation of AP to provide intelligence around cash management in a timely and accurate manner has increased, and the AP team must be prepared to meet it.
4. Accelerate digital transformation efforts
The AP function has been on a digital journey for some time, and automation is the engine propelling it forward. Now, with hyperautomation coming into the picture, businesses are seeing more progressive shifts. Technologies such as artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA) streamline invoice and payment processing without manual intervention, allowing businesses to reap significant rewards, including cost reduction and improved resilience during uncertain times. With these advantages in place, plus many more yet to be discovered, interest in automation and hyperautomation continues its upward trajectory into 2023 and beyond.
5. Turn to eInvoicing networks
AP departments with international suppliers have most certainly dealt with countries requiring electronic invoice submission. eInvoicing mandates are increasingly being enforced around the world to prevent fraud, ensure compliance, and collect taxes due to the government. AP must be prepared to face the complexity of managing, complying, and staying current with the many requirements… That is why more companies are turning to eInvoicing networks for help, and this trend is expected to continue throughout the 2020s.
6. Shift mindset from backend to customer-focused
According to Ardent Partners research, nearly 7 out of 10 organizations believe that a customer service mindset is critical for the next generation of AP. Events in the past years have pushed AP out of the shadows, and with increased visibility came increased responsibilities. AP teams are expected to shed their back-office mentality and become more attuned to their internal and external customer needs.
7. Embrace hybrid working
Since the onset of the pandemic, most organizations are rethinking their office and workforce strategies. Like it or not, more and more employees prefer working remotely or in a hybrid setting. For AP, this means exploring more tools and technologies to help their team work productively, regardless of location.
Business operations will continue to evolve in 2023, and AP needs to be ready for the changes that come with it. By leveraging modern technology and automating manual processes, businesses can maximize efficiency while improving accuracy and visibility. With the right foot forward, AP will be able to thrive in 2023 and beyond.
For more insights on AP trends and predictions for 2023, read the Ardent Partners’ Accounts Payable 2023: BIG Trends and Predictions report. Download now.