Pandemic 2.0, Supply Chain Dysfunction and the Great Resignation drive the race to automate in the new year
Boston, MA, January 18, 2022 – MineralTree, an Accounts Payable (AP) and payment automation solution provider, expects businesses to ramp up their financial automation efforts in 2022, fueled by the ongoing pandemic, continuing supply chain challenges, and the growing labor shortage.
Digitizing more business-to-business (B2B) payments presents a huge opportunity for cost savings, operational efficiency, and greater security for US companies. B2B payments are expected to exceed $28 trillion in 2022, roughly 10X that of consumer payment volumes, according to Insider Intelligence. However, to date, digitization in B2B has lagged the consumer sector considerably. Only a third of businesses have started to automate their AP processes according to a 2021 MineralTree survey, with just nine percent automating the end-to-end process. Many believed their existing paper-based processes were working. But that mindset is changing.
“The pandemic put a lot of focus on manual backend financial processes that became very difficult to do remotely,” said Vijay Ramnathan, President of MineralTree. “It’s clear now — that is unlikely to change anytime soon. Additionally, you have supply chain breakdowns that are changing the way businesses look at their supplier relationships, and a growing work shortage. All these factors are creating an urgency to digitize and automate their financial processes.”
Ramnathan sees five big shifts coming in 2022.
1. Finance Teams Double Down on Remote Work and Remote Tools
MineralTree did some research with mid-market and enterprise finance teams. Prior to the pandemic, 85% reported working fully in the office. During the pandemic, that number shrunk to 22%. In the summer of 2021, it bounced back to above 60%. Six-twelve months from now, about 50% expect to be working remotely or hybrid. The challenges finance teams experienced with manual processes while working remotely aren’t going away. Enabling a remote workforce, improving cash management, and ensuring business continuity are all critical and finance leaders are prioritizing the digitization and automation of back-office financial processes to get there. That will continue in 2022.
2. Suppliers Level the Playing Field in B2B Relationships
Almost 60% of the finance leaders MineralTree surveyed in 2021 said that the strategic importance of their supplier relationships grew. The number was even higher in industries like healthcare where the steady flow of supplies is essential to delivering critical services. Accurate, timely payments are key to those relationships. This emphasis will give suppliers more say in how they get paid as organizations focus on keeping their businesses moving forward and preventing future supply chain vulnerability.
3. Buyers Focus on Removing the Final Obstacles to Supplier Adoption of Digital Payments
Electronic payments are faster, easier, more secure, and less expensive to manage for everyone. Yet despite the obvious benefits, broad-scale adoption has stalled. Ramnathan sees businesses investing a lot more time, energy and technology in three areas to overcome the final obstacles.
A team’s capacity to contact and onboard vendors to accept digital payments. This can be addressed by AP solution vendors that offer services to continuously onboard suppliers to accept digital payments.
Giving suppliers a choice in how they get paid. It has to be a win-win for the buyer and the supplier.
Making it possible for suppliers to manage and update their payment information in one place for multiple customers. Supplier portals can address this need while also providing suppliers with a consolidated view of their accounts receivables along with valuable analytics on things like efficiency, DSO and Credits Outstanding.
4. The Great Resignation Accelerates Automation
It’s been one of the biggest stories of 2021 – people at all levels abandoning jobs to do any number of different things – or in some cases, nothing at all. Regardless, businesses are left in the lurch. This will drive even more investment in automation technologies to fill the labor gap. Manual, paper-based processes in finance, accounting, human resources (ironically), and customer service will be prime targets as businesses look to fill in for hard-to-find talent, and expand on existing, digital transformation initiatives.
5. AP Becomes an Intelligence Hub for the Enterprise
Every organization today is trying to take advantage of data from existing business processes and workflows to improve the way they manage and operate. AP is no exception. As businesses continue to automate their AP function, they will gain access to a treasure of data which will enable them to accelerate their digital efforts, e.g., understanding which payment methods cause the most or least problems with suppliers; forecasting spending and cash flow more accurately; analyzing payments and receivables to free up cash flow; identifying payment frictions in different parts of the business; and predicting potential fraud based on common characteristics. Managed properly, AP data will provide a “single version of the truth” about these aspects of the business, enabling more confident strategic decision-making, improved operational control, and a better understanding of customer and supplier needs.
MineralTree provides modern, secure, easy-to-use Accounts Payable (AP) and payment automation solutions to organizations that have a painful number of invoices and payments. By uniting technology and passionate people, we make the process of business payments easy, impactful, and profitable. Our solutions combine ease of use with robust capabilities that drive meaningful insights, transforming the back office into a strategic partner of the corner office. Making you proud of your back office is our purpose. Please visit us at mineraltree.com.
for MineralTree, Inc.