The role of Accounts Payable (AP) employees has changed drastically in the last decade. Today, AP staff is more likely to spend their workdays in front of a computer rather than chasing down paper invoices.
As technology takes over more aspects of AP processes, what will the role of accountants and AP staff look like in the next 10 to 20 years? Will it become totally automated? Will the AP take on a new role?
Here’s what the future of AP may look like in the coming years — and how to prepare for it.
The Near Future of The Accounting Profession
The future of AP is firmly rooted in the growth of technology in the business world. Artificial intelligence and machine learning technologies are assisting people and processes in every aspect of the business world — including AP. Here are a few ways those changes will change the way the AP department functions.
Accounts Payable Automation is No Longer a Luxury
At this stage, financial professionals are becoming accustomed to the idea that AP automation is no longer a flexible tool only designed for the enterprise level with large budgets. With tools like Stampli, small to medium businesses can too get access to the same invoice capture, code, and automatic approval reminders that automation tools provide to larger enterprises.
When businesses make the shift to AP automation, they don’t just cut AP costs and improve departmental efficiencies; they have the potential to turn their AP team into a strategic and data-driven position.
Changing Security Threats
As digital storage and ACH payments continue to gain ground, many people expect security threats to be reduced — or even eliminated. Although features like cloud storage and limiting access to critical files or ACH accounts can minimize fraud and other security threats, it may also expose additional security issues if controls are not put in place.
For example with payments, while checks are still common, ACH became a preferred method among many to process payments, but that comes with its own set of (ACH) frauds. From reverse phishing to falsified emails, accounts payable will need to stay on top of the changing environments and security threats. Best practices like setting up separate accounts for ACH payments and receiving ACH payments is one control. Moreover, putting ACH blocks on accounts not in use or not permitted, and performing daily bank reconciliations to spot any unusual activities.
Then establishing communication channels with vendors is another, and better yet, utilizing AP automation as the source of truth and communications medium will mitigate sensitive information from getting into the wrong hands.
As the AP department gains access to more data — and in real-time— they may be the first to notice when something goes awry. There may be a significant opportunity for the accounting department to assist businesses and IT with navigating the digital financial landscape and supporting IT security efforts.
AP Will Shift to a More Advisory Position
The shift towards AP automation provides businesses with access to key departmental performance indicators, such as invoice processing time and touchless invoice processing ratio. In addition, AP will gain access to real-time business performance indicators such as the history of payments, account reconciliation, and cash flow.
When these reports are automated — or nearly automated — AP professionals will no longer invest hours developing reports, but rather be tasked with explaining what these reports mean to business stakeholders and making recommendations about improving cash flow and overall business health.
The Long-Term Future of Accountancy: What AP Will Look LIke in 2030 and Beyond
AP automation can already help companies optimize performance, better manage cash, control spending, and mitigate risk in previously unimaginable ways. But, what will the AP department look like in another decade?
Here are the changes AP professionals should keep an eye on.
No Manual Data Entry
With the rise of AP automation, data will flow automatically from clients and systems directly into AP automation software — and even into real-time reports. Manual data entry, and the errors it can sometimes introduce, will be a thing of the past.
Instead of spending time on tedious tasks, AP professionals will move to focus on more strategic tasks. This will give businesses access to more insights — and allow them to grow without increasing the size of their AP staff.
Automatic Alerts and Notifications
AP automation can already provide a wide range of alerts and notifications, such as reminding a decision-maker to approve an invoice. In the future, accountants may have real-time access to a much broader range of data — including financial data about their own businesses and the clients they work with.
These notifications and alerts will allow AP staff to catch issues such as invoice fraud much earlier and have a more accurate sense of overall business health.
Proactive Instead of Reactive Problem Solving
Real-time reports and automated systems will allow AP departments to shift from a reactive model to a proactive model. Instead of waiting for paper invoices to land on their desks, AP employees will be able to login to a digital system and see what requirements are holding up a payment, for example.
Reporting in real-time will allow staff to see challenges before they become more significant issues, for example, noticing a projected dip in cash flow and making proactive decisions to free up cash flow to allow the business to invest in new equipment.
AP Will Play a Much More Strategic Role
The near future of AP will include the shift of AP personnel from paper-pushers to a streamlined digital department. This, however, will not lead to the complete automation of AP, but rather give the department more time to focus on analyzing data, ensuring controls are in place, and looking for opportunities for growth.
How to Prepare Your AP Department For The Future
Two significant shifts are impacting the role of the AP department — disruption through technology and a profession-wide shift from compliance to a more advisory role. These changes are converging to create an environment where AP professionals must be prepared to provide more diverse services and embrace new skill sets in the coming decade.
So, how can AP professionals prepare for the future of AP? By diversifying their skills, leaning into relationship building, and focusing on cash flow.
AP departments are no longer paper-based departments in most companies — and that shift will continue in the coming years. AP professionals should be prepared to take on new roles by expanding their skill set.
A few skills that will prepare AP staff and managers for the future include:
- Data analytics (over data entry)
- Business analytics
- Cloud storage and other technology
- Online and data security
- Business relationship management
Build Better Relationships
Accounts payable interactions once focused on getting approvals for invoices, processing payments, and handling payment-related inquiries so other staff members could focus on critical business decisions.
With the shift towards automated AP software, invoices will be automatically uploaded into the AP system and sent off to the correct person for approvals. Employees will have direct, digital access to all invoice management information they require to do their jobs.
As a result, AP staff will be able to focus on building relationships with business stakeholders both inside and outside of finance and support them in taking action based on the accounts payable data.
This might include working with procurement to identify cost savings and supplier discount opportunities. Or collaborating with sales and accounts receivables to accurately project cash flow.
Focus on Cash Flow
By automating portions of the AP process, businesses will be able to get a clear picture of their cash flow without manually creating reports and sorting data. For example, a company will be able to quickly see their current cash balance, where they’re spending the most, and when payments are most likely to be processed.
This will provide businesses with a crystal-clear picture of cash flow — both now and in the future — which will allow companies to create more accurate plans for growth.
Final Thoughts on The Future of Accounts Payable
There is no magic window into the future; however, the changes in technology and the shift towards AP as a strategic position are clear indications of the future role AP will play.
To prepare, businesses should consider how they can leverage these new sources of data. AP professionals must be willing to learn new skills related to security and technology, which will prepare them to become strategic partners rather than paper pushers.
Is your business ready to take the leap into AP automation? Stampli simplifies the process with our no-sweat setup and works with your current systems so you can leverage the power of automation in no time.