Automation, managed services impress vendors

The State of AP Report, published Sept. 22, 2022, by MineralTree, a Global Payments brand, examines advanced AP automation and B2B payments and their potential to mitigate ongoing supply chain disruptions in the wake of a global pandemic. By focusing on vendor relationships, researchers identified the most pressing issues that impact relationships between buyers and suppliers.

Participating companies from a mix of industries had annual revenues ranging from $1 million to over $1 billion, with most respondents holding manager positions, according to Elizabeth (Elle) Kowal, chief operating officer at MineralTree.

"In 2022, AP teams face a number of significant challenges – supply chain disruptions, work-from-home and hiring challenges, and an increasing volume of invoices and vendor inquiries," Kowal said. "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. Automation handles common AP headaches for understaffed AP teams while elevating productivity, visibility, control, savings – and even earnings."

Kowal further noted that the 2022 report highlights the need for companies to establish strong relationships with vendors, uncovering ways in which AP teams can address operational challenges. This year's report also charts the rise of digitization of accounting systems and operations, she noted, particularly in epayments, as enterprises implement digital tools to optimize AP operations and expedite vendor remittances.

Digitization is key

By viewing epayments through the lens of supply chain, MineralTree researchers found nearly 71 percent of finance leaders viewed vendors as a key strategic resource, compared to 59 percent the previous year. The study pinpointed pandemic-related challenges for enterprises, both in paying vendors on time and accessing business-critical resources, including the following examples:

• Invoice delays: Respondents cited invoice processing issues and delays (44 percent), followed by payment delays and/or reconciliation issues (39 percent), attributed to supply chain issues.

• Staffing shortages: Respondents said the Great Resignation placed increased pressure on AP teams. More than half (54 percent) of the managers surveyed staffing challenges to continue.

• AP automation: Respondents have found AP automation shortens invoice-to-payment cycles, with 52 percent automating AP, up from 32 percent last year, but with only 16 percent having achieved full automation.

• Epayment adoption: Respondents continue to migrate to epayments, increasing from 65 percent in 2021 to 71 percent in 2022. Among the categories, virtual card usage grew from 9 percent in 2021 to 38 percent and ACH grew from 50 percent in 2021 to 67 percent in 2022. International/FX was third (percent), likely due to the need to source new overseas vendors to compensate for supply chain disruptions.

Ongoing challenges

Overall, researchers found vendors on board with digital payments, stating 82 percent want more electronic payments from B2B customers. Among top concerns, 63 percent of vendors complained that customers continue to pay by check; 40 percent remarked that epayments can be costly and time consuming to implement. Partnering with an AP automation provider that offers seamless and agile vendor enrollment would easily resolve these issues, researchers noted.

"When asked what they value most from the payment experience, vendors' top response is the speed of payment (84.4%), followed by payment accuracy (67.2%), and processing cost (52.2%), among others," researchers wrote. "Yet, market and organizational challenges hinder AP's ability to quickly process and pay invoices, and ultimately fail to deliver on their vendors' wishes."

The 2022 State of AP Report is available for download at www.mineraltree.com/resources/whitepapers/state-of-ap-report/ .

Whether you want to upgrade your POS offerings, find a payment gateway partner, bone up on fintech regs or PCI requirements, find an upcoming trade show, read about faster payments, or discover the latest innovations in merchant acquiring, The Green Sheet is the resource for you. Since 1983, we've helped empower and connect payments professionals, starting with the merchant level salespeople who bring tailored payment acceptance and digital commerce tools, along with a host of other business services to merchants across the globe. The Green Sheet Inc. is also a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals.

Notice to readers: These are archived articles. Contact information, links and other details may be out of date. We regret any inconvenience.