Businesses are rethinking the way they approach accounts payable.
With FinTech disruption rapidly changing the way finance and accounting teams operate, accounts payable has been among the slowest to adapt. However, accounts payable automation technology is creating a paradigm shift, and changing the way AP teams are thinking about the end-to-end process of paying vendor invoices.
In a recent survey, MineralTree interviewed hundreds of finance and accounting professionals to dig into how accounts payable teams are operating in 2018, and determine any shared characteristics among the most modern teams leveraging the most cutting AP processing technology.
Among all respondents, these four characteristics rose to the top:
1. Modern accounts payable processes are run by small teams
Accounts payable processes that featured at least two automated processes were run by small teams (1-2 people) .
Additionally, it’s important to note that these teams are able to remain small even as their company and list of vendors grows because of the scalability that AP automation creates.
While businesses with antiquated AP processes must add headcount to keep up with the growing volume of invoices, modern AP teams are largely unaffected by growth and their businesses are able to allocate the additional headcount and resources to other areas of the company that stand to benefit.
2. Modern accounts payable teams spend less time on data entry and reconciliation
Within both antiquated and modern AP processes, “reporting and reconciliation” was described as the most time-consuming daily process for respondents, with “data entry” not far behind.
However, when observing a side-by-side comparison between modern AP teams that are automating their accounts payable process and non-modern ones that are performing manual processes, there is a stark contrast in the amount of time that these tasks are taking up.
In fact, the non-modern teams performing manual accounts payable tasks reported spending an average of nearly three times the amount of time processing invoices than modern teams benefitting from automated accounts payable.
3. Modern accounts payable teams pay a higher volume of invoices
Teams with automated accounts payable consistently reported a higher volume of invoices being processed and payments being made.
Among the companies that manage more than 250 invoices every month, 95% have automated at least two functions in their accounts payable process. Additionally, seven in 10 companies (71%) that handle more than 50 invoices each month have automated their accounts payable to some extent.
In many instances, it will make sense to automate accounts payable. Companies that have a high volume of invoices or are anticipating adding vendors should definitely consider investing in automation to ease the pains that typically plague growing midsize companies. However, if you have an invoice volume below 50, you will likely not feel the same level of pain.
4. Modern accounts payable teams utilize corporate credit cards for vendor payments more often
Utilizing corporate credit cards for vendor payments can lead to cash rebates and a decreased risk of fraud, but it can be a hassle to find vendors that accept it as a payment method. However, modern accounts payable teams automating AP manage to leverage corporate cards more than the teams with no AP automation.
While 43% of all respondents said they make at least 10% of their B2B payments on corporate cards, that number increases to 79% among respondents automating two or more processes in accounts payable.
To learn more about the characteristics of modern accounts payable teams, read the full survey report, Defining Modern Accounts Payable.
Are you curious to see what your AP team would look like with a more modern process? Contact MineralTree for personalized assessment of your projected time savings and benefits with end-to-end accounts payable automation.