Despite the introduction of digital wallets, cryptocurrency, and tap-and-go payment methods, there are still a surprising number of businesses still processing paper checks as their primary source of payments. Studies show that small merchants, in particular, make close to 75% of their payments using paper checks.
However, businesses lose anywhere from $4 to $20 to cut, mail, and process each paper check within their networks. Issuing checks is just one example of an entrenched yet outdated process in accounts payable that is ripe for automation.
The Federal Reserve Bank of Philadelphia estimates that paper checks are projected to completely disappear by the year 2026 as companies adopt automated payment processes. Let’s look at some other accounts payable automation trends that are set to help this business function become faster, more productive, and more accurate in the next few years.
Payment errors — especially at companies still using paper checks — plague businesses across the US. One study found that payment errors affect an average of 9% of payments, though this rate increases at merchants with multiple locations, those who work with lots of suppliers, and in AP teams with high turnover.
Double invoicing is a particularly pernicious problem: the typical small business is dealing with a 1.29% duplication rate – about six duplicate invoices a month. The average amount on those invoices was $2,034, meaning that these small businesses are losing about $12,000 per month if each duplicate invoice is paid.
[Read more: How to Avoid Double Invoicing]
Automation makes it easy to avoid double invoicing. Platforms such as Glean AI use automation to detect and flag when a vendor has been overpaid so the company can immediately fix the problem. Additionally, alerts automatically notify users when possible duplicate invoices have been received. Glean AI’s advanced analytics engine studies invoice timing, and can immediately stop the suspect invoice from being paid.
Consider this statistic from CPA Practice Advisor:
“Seven in ten finance teams (72%) spend up to 10 people-hours per week, or 520 hours per year on AP-related tasks that could be automated, such as invoice processing, supplier inquiries, supplier payments execution, PO matching, new supplier registration, and payment reconciliation.”
Let that sink in: your company could be losing 520 hours to tasks that can easily be automated. The talented employees at your company are likely bogged down in manual, time-intensive processes that aren’t making the best use of their knowledge and expertise.
Integrating automation across the accounts payable process can help your team take time back. Tools like Glean AI can process and approve invoices without requiring data entry, make payments, sync bills with GL systems, and get deep insights to fuel growth. Far from replacing accountants, they empower professionals to work smarter, not harder. Time truly is money: Accounts payable automation is shown to lead to 80% increased operational efficiency and a 366% ROI.
[Read more: The Future of Accounting: 6 Changes Accountants Can Look Forward To]
Smart finance leaders are focusing on cost optimization over cutting costs. Cost optimization centers around the concept of value: doing more with less. Rather than achieving short-term profit by slashing costs, this practice seeks to take advantage of existing assets, increase efficiency, and enable employees to perform better with the right tools.
Accounts payable automation trends can empower better cost optimization throughout the organization. By automating the routing and approval of invoices, teams can save time. By centralizing spend data in one place, businesses can gain insights that lead to cutting overall annual expenditures by 5% to 10%. And, by paying vendors on time with automatic payments, AP and procurement teams can negotiate better value contracts with suppliers and vendors.
Cost optimization and automation go hand in hand. Automating repetitive processes enables teams to optimize where resources are being spent to maximize value. It’s a win-win.
Today, finance teams — and especially finance leaders — struggle with spend visibility. According to our research,
[Read more: Finance Teams' Lack Of Spend Visibility]
Automation gives finance leaders to see both the big trends and the smallest line-item details, with context for both. Glean AI automatically gathers data from the underlying cost-drivers found on invoices: items purchased, unit pricing, and volumes ordered, for instance. The platform analyzes the data to produce relevant, non-intuitive insights on every bill. And, centralizing the data in one place gives finance leaders a complete view of vendor spend to drive smarter decisions.
The final accounts payable automation trend has to do with security. Remember how many companies contend with double invoicing? Sometimes, double invoicing isn’t an honest mistake, and actually a more nefarious practice: payment fraud.
Invoice fraud is on the rise. In a typical invoice fraud scheme, hackers convincingly spoof the email address of a known business partner, like an attorney or vendor and send you an invoice to be paid into the hacker’s account. Unfortunately, 64% of organizations rely on manual processing to detect duplicate invoices, which is what makes this form of fraud so effective.
AP automation tools allow AP teams to stop spending time checking for invoice fraud and instead rely on analysis to detect anomalous pricing changes. Error checking and notifications can help busineses protect their accounts payable from bad actors and keep growth on track.
To learn more automation in the accounts payable process, and to see Glean AI in action, request a demo today.