January signals the planning and implementation of Accounts Payable’s strategy for the year. Accounts Payable Trends for 2020 will no doubt be on your mind as you begin to look at areas to concentrate on.
Throughout the last 12 months, AP’s focus can be split into four key areas. While they will remain significant in 2020, new developments are set to emerge, with technological advances continuing to dominate the progression in this field.
Before we delve into the 2020 trends, let’s take a brief look at the AP trends that captured 2019.
Accounts Payable Trends That Shaped 2019
Automation, Fraud Prevention, Data Leveraging, and Skill Development were topics that defined Accounts Payable in 2019. Although a new year is upon us, their impact will continue to play an important role in this year’s AP planning.
Automation took center stage in 2019. Improved automation features helped companies boost data accuracy and operational efficiency. According to Levvel research, a reduction in paper invoices, a faster approval process, and higher visibility into outstanding invoices and liabilities were just some of the main benefits that businesses reported over the last year due to automation implementation. There was an increase in the popularity of AP cloud applications. Specifically, there was a rise in the use of multi-cloud strategies. These gave AP professionals the ability to use public, private, and hybrid environments for various workloads.
90% of businesses surveyed by Strategic Treasurer said they felt Accounts Payable was the most susceptible department to fraudulent attacks. Thankfully, almost half of companies who were asked said they’re investing in methods to prevent fraud, according to PwC. Want to know more about the ways to prevent fraud in your company? We’ve recently written about fraud detection and prevention, read it here. Enhanced systems also gave users easier ways to pay and better methods to respond to issues, to remain one step ahead.
Access to Big Data allowed AP professionals to zone in on methods to leverage that information in 2019. Better leveraging techniques were fundamental to improving efficiency in AP departments and for identifying trends, which enabled them to grow operations.
In the past, many AP professionals focused on developing and maintaining skills that aided task execution. Many departments concentrated their efforts on building new skill sets to match a higher demand for automation in 2019.
Critical Accounts Payable Trends for 2020
Keeping the previous points in mind, let’s bring our attention to the trends that should mold your planning for Accounts Payable in 2020.
Trend 1: Modernization
This trend is closely connected to the new skill development push. If you want to stay ahead and improve efficiency, you must utilize modern techniques and tools. If companies want to teach workers new skills, they have to provide the resources. Alternately, if companies invest in more advanced infrastructure changes, they must ensure that their AP professionals are capable of managing it effectively. Embracing technology and encouraging the high-level usage of AP automation solutions have shown that companies not only save money but precious time too.
That extra time employees gain through automation can be used for other high-value tasks. In fact, a Levvel report forecasted that a company employing 5 full-time AP clerks, handling 20 invoices, and 5 vendor inquires per day could save up to $152,000 in labor costs annually.
Trend 2: Strategic Growth
For Accounts Payable in 2020, mergers and acquisitions could be on your goal list. These types of strategies give you more opportunities to expand your reach and add capabilities. For example, a company that lacks B2B payment or cross-border payment services may acquire a smaller company that offers the prospect to expand its capabilities.
Trend 3: Hosting in the Cloud
Forbes predicted by 2020, 83% of Enterprise workloads will be on the cloud. Accounts Payable are no exception, and the growth in companies moving to hosted solutions is set to expand in 2020. Low cost and GDPR compliance make hosting in the cloud an attractive move. Additional benefits include access to data in real-time and a quicker implementation process than on-premise solutions.
Trend 4: Facial Recognition Payments
In recent years, the popularity of fingerprint-based payments grew. More people purchased smartphones with touch sensors, and app developers modified apps to fit the new technology. Today, the latest security feature is facial recognition. Some apps are allowing this feature for payments now, and Gartner expects that it will continue into Accounts Payable Trends for 2020. It will continue to disrupt QR code, credit card, and other forms of payments.
Trend 5: Artificial Intelligence
Although several AI tools have already been in the AP space for employee productivity and customer service, you will see further progression and evolution in 2020. More firms are starting to realize the significant financial impact that AI tools offer. The Sage Practice Now 2018 Report also showed that 66% of accountants would invest in AP automation with AI. A further 55% reported that they planned to use AI to run their business better.
This year holds exciting prospects in areas such as AI, automation, and technology. Accounts Payable will see the need to redesign their processes, whether that’s going hosted, modernization or through strategic acquisitions. If you are in a critical decision-making role, use the Accounts Payable Trends for 2020 to determine where you want to compete and what resources you’ll need in order to achieve the goals you set.