In 2022, companies are ramping up their digitization efforts to overcome ongoing operational challenges caused by the pandemic, including disrupted supply chains, hybrid work environments, and the Great Resignation. Industry experts expect these issues to persist for the foreseeable future, further burdening finance teams struggling to keep up.
While the pandemic caused significant, ongoing challenges across business operations, nowhere in the back office is its impact felt more acutely than in Accounts Payable (AP). That’s because of AP’s strategic role in paying vendors on time and ensuring strong relationships to ensure access to business-critical resources.
Recent research by MineralTree shows that finance leaders realize the importance of AP, as well as the obstacles it faces, in a year marked by volatile supply chains and staffing issues. Meanwhile, business executives continue putting pressure on financial leaders to pay vendors on time to keep goods and services flowing.
Historically, businesses have addressed operational issues by adding headcount. However, this is not a viable option today given the shortage of solid candidates, rising wages, and prioritization of customer-facing hires.
For those who are able to fill their open roles, many still struggle to solve the inherent inefficiencies and unnecessary costs of manual AP processes.
ePayments and the Buyer-Supplier Blame Game
ePayments play an integral role in a fully digitized and optimized AP process because they deliver significant benefits to both buyers and suppliers by way of operational efficiencies, speed of payment, financial visibility and cash flow control. Yet, buyers and suppliers continue to name each other as the biggest obstacle to furthering ePayment adoption.
In MineralTree’s research, 57% of finance leaders cited vendor unwillingness to accept ePayments types as the top reason impeding its growth. Conversely, 63% of vendors identified the primary obstacle to ePayment adoption as being customers not ready to move away from checks.
Other concerns from buyers center around their perception of the time and effort it takes to set up ePayments, including team capacity to contact/enroll vendors. The irony is that finance leaders can easily eliminate this anticipated work by partnering with an AP automation provider that offers managed services.
AP Automation + Managed Services = Increased ePayment Adoption
Managed services from AP solution providers can help both buyers and suppliers realize their shared goal of more ePayments.
Managed services take on the time-consuming administrative tasks involved in executing payments, onboarding vendors, updating payment information, responding to inquiries, and resolving payment questions. They allow both buyer and supplier finance teams to work more efficiently and focus on finance priorities, while also strengthening supply chain relationships.
As an extension of the finance team, AP solution providers can not only help drive more ePayment spend today, but also expand the benefit as more vendors sign on in the future. The solution provider can also help the finance team maximize savings by optimizing the payment mix and encouraging virtual card adoption to increase rebates.
As part of their managed services offerings, AP automation providers can also handle the intake of payment details from vendors, including bank account information for ACH payments. This removes a key administrative burden from AP teams, freeing up time to focus on other priorities. Because these providers often employ rigorous process controls and protocols to safeguard sensitive information, they also help mitigate fraud risks.
Additionally, managed services providers handle all vendor inquiries, so the AP team doesn’t have to – removing a major time sink from operations. This gives AP teams more time to focus on core functions and identify strategic payment opportunities.
At the same time, because managed services providers are focused on vendor services, they can respond promptly to inquiries, helping to increase vendor satisfaction and improve relationships.
Adopt Managed Services to Overcome ePayment Obstacles
Vendor inquiries create disruptions and more work for overtaxed AP teams, often resulting in a slow response to vendor inquiries. While automation helps to reduce the interruptions, managed services ensure all inquiries are handled in a timely manner and take vendor service to the next level.
By handling all the details of vendor relations in ePayments, managed services enable AP teams to benefit from continuous vendor enrollment, greater savings and rebates, reduced fraud risk and improved vendor relations from quicker, effective service.
AP automation, combined with managed services, is a no-brainer for AP teams trying to do more with less, and stay afloat amid supply chain volatility. It handles common AP headaches for overtaxed, often understaffed AP teams while elevating productivity, visibility, control savings and even earnings.
Elizabeth (Elle) Kowal is Chief Operating Officer at Mineral Tree, a company focused on creating frictionless accounts payable (AP) and payment processes. She has spent more than 18 years in banking, finance, payments and business technology providing solutions for organizations of all sizes.
Like what you’re reading?
Subscribe to our FREE newsletter and we’ll deliver content like this directly to your inbox.