Let’s talk about a really important part of how businesses handle their money, known as “accounts payable.” Things are changing a lot in this area, and we’re going to explore the big trends that are happening now and in the future, all the way into 2024 and beyond.
Think of accounts payable as the department that takes care of paying bills and managing money for a business. It might not sound super exciting, but it’s a big deal because these changes are making businesses work better.
We’re going to look at how new technology, like computers and smart machines, is making things faster and less likely to have mistakes. We’ll also talk about how businesses are starting to care more about being kind to the environment and how that can actually save them money.
Lastly, we’ll explore how businesses are getting better at working with the people they buy things from. By doing this, they can save money and grow. So, let’s dive into these trends and see how they are changing the world of accounts payable for the better!
Key Accounts Payable Challenges
Despite digital transformation impacting every sector and function, several businesses still use manual, paper-based processes to manage their accounts payable. This status quo results in the following common challenges:
Manual processes slow down the execution of the accounts payable function and come at a higher labor and time cost
It is easy for errors to occur during the process of data updation
Accounts payable executives need to manually follow up to get invoices paid. At times, they may forget, and stop following up altogether
There is less potential to detect fraudulent accounts payable transactions due to unauthorized purchases
Human error can lead to companies paying for goods and services, which are not yet delivered
Businesses do not have access to valuable accounts payable data that can help them make strategic decisions
All these challenges, collectively, lead to a company’s cash flow being adversely affected.
Top Accounts Payable Trends for 2024
Here is a snapshot of rising trends in accounts payable, which are transforming this key business function:
1. The Rise of Automation in Accounts Payable Processes
The future of accounts payable management will witness a significant shift from manually managing accounts payable to leveraging tech-enabled accounts payable software. This shift will bring more efficiency and transparency to accounts payables.
2. The Role of AI in Improving Accounts Payable
The usage of Artificial Intelligence (AI) will power the automation of accounts payable processes. For instance, it will drive invoice processing efficiency and enable balance sheet forecasts via access to data.
It can also support businesses in an important area – compliance issues – by automating fraud detection in invoicing and other areas, through pattern identification. AI will thus play a pivotal role in accounts payable transformation.
3. The Importance of Data Analytics in Accounts Payable
Access to technology is powering valuable data insights that businesses can use to help them function more efficiently. Businesses can customize dashboards and get access to specific data.
For instance, within a few clicks, it is easy for a business to evaluable payment patterns for a specific period. Businesses can also ensure that there are no data leakages and duplications, and that all data is accounted for.
4. The Impact of Blockchain on Accounts Payable
Implementation of blockchain on accounts payable will make this function much more transparent. Blockchain ensures a single version of the truth. It reduces the potential for any kind of fraud without immediate intimation from all the relevant stakeholders.
5. The Growth of Mobile Invoicing and Payment Solutions
One of the biggest benefits of mobile invoicing is that payments can be made and acknowledged instantly. Accounts payable executives will no longer need to chase businesses for invoices, or confirmation of payments.
With the arrival of innovative payment solutions, businesses can make payments in a safe, secure, manner. Payments can become automated, instant, location-agnostic, and transparent.
6. The Impact of Remote Work on Accounts Payable
Accounts payable automation enables teams to collaborate seamlessly with their remote team members. Since all data is securely stored on the cloud, it can be retrieved from anywhere, at any time.
This potential gives businesses a chance to take advantage of the benefits of hybrid and remote work modes.
7. The Evolution of Payment Technologies
The evolution of payment technology has enabled businesses to reduce the very expenses traditionally experienced with paper payments, and overseas payments.
Businesses can also choose and plan their payments based on their payment mode of choice. For instance, a business may prefer to make all payments using a credit card which improves their credit will enough. The evolution of payment technology is often the power of choice.
8. The Role of Accounts Payable in Driving Business Growth
An efficient accounts payable function enables businesses to drive business growth due to several outcomes. It helps them improve their credit scores, reduces financial fraud liabilities, allows them to improve their cash flows, and prevents overpayment.
Businesses can leverage the excess cash to plan better, invest it back into the business, and drive growth.
The Takeaway
In simple terms, when it comes to paying bills and managing money, there are some big changes happening for 2024 and beyond. These changes are making it easier and more efficient for businesses. New technologies like automation and artificial intelligence are helping companies pay their bills faster and with fewer mistakes. There’s also this cool thing called blockchain, which makes payments safer. Companies are also thinking more about being eco-friendly, which is called sustainability. This is important because it helps our planet while also saving money.
One more thing: businesses are working closely with the people they buy things from, like suppliers. By building better relationships with them and being clear about money stuff, companies can save money and grow. So, in the future, businesses that use these new ideas and technologies for handling money will do better. It’s all about making things simpler, faster, and better for everyone.
About Us
OHI is a specialized finance and accounting outsourcing service provider since 2006, providing skilled and experienced accounts payable specialists at economical rates. High expertise in QuickBooks, Xero, NetSute, Yardi (Genesis and Voyager), AppFolio, Timberline and Microsoft Dynamics. Our services are used by 300+ businesses across sectors like real estate, construction, logistics & transportation, retail, manufacturing, IT firms and CPA firms.
