The fountain of youth: agile accounts payable in a digital age

Key takeaways

  • Technology innovation brings opportunity and a greater risk of payment fraud. Accounts Payable teams need to build automated processes and system agility.
  • Centralization and automation through a single payment ecosystem that integrates seamlessly with ERP systems and data sources are critical to building the backbone of more advanced data applications that will evolve the role of Accounts Payable.
  • Through trusted partnerships, AP teams can leverage comprehensive fraud risk capabilities that reduce the cost and complexity of multiple systems while maintaining best-in-practice fraud prevention, which is critical for agile digital adoption.

Many Accounts Payable (AP) teams find themselves at a crossroads between digital transformation and the status quo. Innovation presents opportunities for improved efficiency and challenges in the form of payment fraud. By centralizing and automating processes, AP teams can build the agility necessary to thrive in the digital age.

 

The landscape of payments, banking and technology is evolving at an unprecedented pace. With each new technology come a host of opportunities for process improvement and automation that can elevate the strategic role of Accounts Payable teams and alleviate reliance on manual processes.

 

Technology innovation and the speed of change are also introducing new payment fraud risks. The range of tools wielded by fraudsters is becoming increasingly sophisticated. With the use of deep-fake voice and videos, social engineering is becoming more effective, and heightening the risk for AP teams on the front lines.

 

To successfully navigate these challenges and capitalize on the benefits of digital transformation, AP teams must evolve and embrace agility.

Speed, centralization and automation

While manual AP processes promise flexibility, their reliance on the knowledge and time of a few key personnel oſten leads to rigidity and increased risk. Unable to keep pace with dynamic business flows, these manual processes quickly become bottlenecks to agility and innovation, and potential fraud risks.

 

On the other hand, automated digital tools allow quick adjustments that leverage machine learning and empower organizations with flexibility, configurability and security.

 

This paves the way for faster operations, more rapid technology adoption and the potential for comprehensive data utilization. From simple reporting to advanced machine learning (ML), the horizon of possibilities broadens, opening up opportunities for automated early payment discounts, precise cash flow insights, data-driven decision-making, and advanced forms of fraud prevention and detection.

 

At the heart of these AP processes lies the Enterprise Resource Planning (ERP) system. AP digitization isn’t intended to replace this system of record. Instead it enables integration allowing AP teams to operate within a centralized, unified framework. With this framework, data flow between systems creates seamless connectivity and comprehensive reporting. The insights derived from advanced analyses within AP tools are then effortlessly communicated to the ERP system for dissemination to a broad range of non-AP users and executive stakeholders.

 

This level of visibility and centralization from an integrated payment system provides value to all industries, but particularly to those with dispersed operations such as commercial real estate and healthcare.

 

These firms stand to gain significantly from AP tools that consolidate multi-entity locations, eradicating silos and ushering in transparency through a holistic, macro view of the business and its cash flows.

 

With the right balance of speed, centralization and automation, AP teams can build the agility to adapt to new technologies, manage fraud risk and satisfy their broad range of stakeholders.

Here are five ways Accounts Payable can support digital transformation, agility and automation:

 

  1. Create a single, flexible payment infrastructure to simplify and automate. AP technology must build toward a comprehensive payment ecosystem that allows all mechanisms to be managed through a single user interface. This interface can seamlessly integrate with existing ERP and accounting systems, bank accounts and supplier systems to support automation and straight-through processing.
  2. Leverage insight-driven reporting to improve decision-making. Integrated, easily shareable reporting across all payment types adds quantifiable value and improves decision-making. Automated, real-time reporting can improve remittance reconciliation and reduce AP workloads. Response times for management queries such as ‘What is the value of open payables?’ ‘What is anticipated cashflow?’or ‘How many payments need to clear before the accounting ledgers can be closed?’ can be reduced from weeks to minutes.
  3. Leverage supplier networks to automate supplier data management. Large, curated supplier networks offer opportunities for data efficiency and provide day-one automation of communication and onboarding.  Centralized data improves reconciliation and reduces the risk of payment fraud.
  4. Enhance supplier authentication to reduce the risk of fraud. Supplier authentication processes should include the validation of supplier payment data as well as supplier identity. The validation of supplier payment data reduces the risk associated with confirmation of payee, which is a critical element in business-to-business payment fraud. Validation processes should include standard password authentication as well as adaptive technologies such as IP addresses and email authenticity.
  5. Keep moving forward with the next generation of digital tools. The first step is to establish a centralized system of consolidated, curated data to which more advanced analytics can be applied. With this foundation of data and process efficiency, the AP team can move on to predictive analytics, artificial intelligence and machine learning applications that provide forward-looking insights.

To achieve these objectives in a cost-effective manner is challenging. This is particularly the case for maintaining best-in-practice fraud protection where detection of digital identity, account validation, and invoice processing and validation capabilities are oſten applied through multiple modules or vendors.

 

To support Accounts Payable teams, Bank of America has developed a single-platform payment experience that facilitates consistent, integrated and automated processes. We continually invest in new payment modalities to automate the full range of payment methods. With a growing network of over a million suppliers, your AP team can benefit from day-one automation of supplier communication and onboarding while ensuring industry-leading fraud protection, implemented simply and cost-effectively.

 

Speak to your Bank of America relationship manager to understand how our comprehensive payables solutions can help your Accounts Payable team evolve and empower your businesses to harness the true potential of agility in the digital age.

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