2020 has been a challenging year for most businesses and industries. The impact of COVID-19 has not just affected the enterprise, but also across the financial supply chain.
In a recent report released together by Ardent Partners and Process Fusion, they found that 58% of organizations had been extraordinarily or significantly impacted by the pandemic, while 42% reported either having some impact.
On one hand, COVID-19 has brought on huge obstacles into the business world, but on the other hand, it has also helped accelerate the speed of digital transformation in the work environment.
The challenge of remote workers remaining engaged and efficient was crucial in 2020, and while many AP teams remained productive, some were not ready for the challenges that came upon them.
The global pandemic did not just shift our work environment from the office to our homes but also affected the way many accounts payable teams pay their suppliers.
Not only were professionals dealing with personal issues working remotely at home, but AP leaders also dealt with significant changes happening within and surrounding their organization.
Almost every department within AP has been affected by COVID-19, with 28% reporting an extraordinary or significant impact, while only 71% of departments had some to a little degree of impact.
The difference between these two groups came down to the level of automation and technology adoption within their AP department. Some AP departments had already adopted process automation and workflow efficiency, making them better prepared to work in a remote setting.
The new normal has also forced CFO’s to focus more on cash and vendor payments, due to the difficult times, 53% of businesses changed how and when suppliers were paid. This also meant changing payment terms, with some business paying their vendors faster earlier to assure supply.
CFOs and other finance leaders were also keeping a closer eye on their B2B payment processes and systems, to ensure the best way to maintain internal liquidity and still pay their suppliers.
Manual paper-based processes like paper invoices are still the most common method for AP teams and will continue to be a top challenge for AP departments in 2021.
At the same time, social-distancing and shelter-in-place policy has inhibited some significant in-person procedures in the workflow processes, which brought a negative impact to AP, such as a high percentage of exceptions (48%) and too much paper (31%).
Additionally, a majority (60%) are also still facing long invoice and payment approval times, due to remote work and lack of comprehensive automation.
Another big challenge that is holding AP back, is the staff time spent handling supplier inquiries. Almost 25% of all AP staff time is spent on dealing with supplier inquires, and while this is an important function, organizations should analyze why suppliers are contacting them and instead deploy self-service tools that can automatically communicate key milestones and data regarding invoices or payment processing. By reducing the time staff spend dealing with suppliers’ inquires, AP can focus more on value-added activities.
The events of COVID-19 in 2020 has presented accounts payable with an opportunity to drive change in the organization and position itself as a source of value to the business.
To maximize the impact of these changes, AP departments should focus on automating the entirety of their processes, including invoice receipt, processing, and supplier payments.
As a profession, accounts payable is moving towards a greater need for digital transformation and should focus on how to best support the overall business, while making a push to increase automation and providing a positive impact on financial operations.
By having an intelligent data capture and process automation solution, businesses will be able to work with higher efficiency and reduce operating costs associated with data errors and workflow approval delays.