It’s time to talk about the elephant in the room. The burning question on every accountant and AP employee’s mind — will the AP department be entirely automated in the next few years?
The trends don’t look promising — one report found that nearly 46% of companies plan to implement some level of AP automation in the next year. Which makes sense, when you consider that implementing AP automation has the potential to save businesses thousands of dollars a month in invoice processing costs alone.
But what does the evolution of AP automation mean for accounts payable departments?
The Remote Reality for Finance and AP
For starters, we all witnessed how the COVID-19 epidemic forced businesses to work remotely and how it uncovered the many challenges in accounts payable for those still relying on manual P2P functions. Many of those challenges stemmed from paper processes and workflows which made invoice communications even more difficult throughout the approval process.
As businesses start to reflect on the AP Remote Reality, which could happen again at any point in the future, financial professionals will need to develop business continuity plans to prevent business disruption again in the future.
This will involve automation, especially in accounts payable and the ability to ensure AP staff can work remotely in case of a national or global disaster. But will AP be completely automated? Here’s what we know.
Is the Future of AP Departments in Jeopardy?
When it comes to AP, automation is not a vague future event that might occur one day in the distant future.
In fact, automation is happening right now, from automated assembly lines to technologies like Stampli that automate and streamline AP tasks such as data entry and provide access to real-time data about business financials.
What does this shift towards automation mean for employees in the AP department, the companies that employ them, and does automation mark the beginning of a transformation for AP professionals?
Will the AP Department be Fully Automated?
Is the future of AP a robot rather than a human accountant? Not at all.
Artificial intelligence and machine learning cannot replace the skills, expertise, and decision-making capabilities of AP professionals — and they aren’t designed to.
What automation can do is take on the time-consuming and repetitive tasks, such as filing papers, verifying invoices are valid, fostering a centralized communications environment, and automating manual data entry. In result, AP professionals can focus on strategic financial tasks such as freeing up cash flow, looking for ways to save money, and analyzing data.
A report by the Capgemini Research Institute found that businesses could see $165 billion in cost savings by 2022 if automation is adopted at a wide scale across departments. Cost savings like this could mean big things for businesses — and the AP department.
What Does Automation Mean for Accountants and AP Professionals?
Robots will not take over the AP department — and here’s why. Think back to when the ATM was first created and thought of as a machine that will take jobs, but yet, there are still bank tellers. Then consider assembly lines and autonomous transportation from freight, planes, trains, and automobiles — they all still have humans behind the wheel.
You can’t take artificial intelligence to a team or board meeting. A computer can’t provide context for financial projections. And robots can’t make sure that internal controls are implemented correctly.
Finance Professionals’ and the Remote Reality
AP automation has the ability to unlock the AP department’s potential from any location. No longer will the department be bogged down by manual work like data entry and accounting tasks that have to take place at a physical office location.
Instead, they will be able to spend more time looking for ways to save money such as crunching numbers to look for trends, negotiating for better terms with vendors, uncovering fraudulent activity, and better protecting the company as a whole.
Less Time Generating Reports; More Time Analyzing Data
Tracking AP metrics through manual paper processes is not just time-consuming, it is also prone to errors and makes analysis cumbersome, while also not being in real-time. AI has the potential to take over the creation of a variety of financial reports — including reconciliation of accounts, history of payments, and even creating audit reports in real-time.
AP professionals will be freed up from creating those reports, but will still be needed to analyze that data and explain what it means for the company. For example, data analysis might help a business find discrepancies within its vendor network — but AI can’t fix the problem.
AI will provide the information the AP department needs, while humans will still be necessary to take action.
The Rewards of Real-Time Reporting
The creation of reports can be a time-consuming process, which limits businesses’ ability to access their data regularly.
Real-time reports can be automatically generated on a weekly — or even daily basis — allowing businesses and the AP department to rely on hard data to make critical business decisions at a much faster speed. This will allow AP professionals to spend more time using data, for example, to manage relationships with suppliers, rather than creating the reports themselves.
Improved Speed and Agility
Business decisions move at the speed of data — and when that data is available in real-time, businesses can make critical decisions faster. AP automation may also free up cash flow and help firms save money on late fees and invoice management processes. That cash flow can be used to buy in bulk or pay earlier, identify vendors with more favorable terms, or enact a number of other beneficial business changes.
For example, an audit that may have taken three to four months to complete in previous years may be completed in weeks and require far less input from the AP department. This leaves financial professionals more time to focus on building a business that is prepared to navigate the highs and lows of the market.
How AP Professionals Can Prepare for A Remote Reality
AP professionals are concerned for the future of their field — and rightfully so. Automation is poised to drastically change the way the AP department runs. However, it cannot replace the expertise of humans when it comes to communicating, providing context for data, and looking for ways to improve the business as a whole.
It is clear, however, that the role of the AP department is shifting, and employees looking to stay at the top of their game should look to gain skills in areas such as data analytics, communication, and strategic thinking.
Ready to learn more about how AP automation can save your business time and money? Our no sweat set up means your business can start taking advantage of AP automation in one day.