Quite a year, 2020. Unexpected, unprecedented, exciting—you know all about it.
But let’s move on. It’s now time to build on all we learned and accomplished this year and look forward with enthusiasm towards coming out stronger than ever in 2021. As a finance professional next year, you’ll be able to explore new ways to integrate accounts payable (AP), accounting and enterprise resource planning software.
You’ll capitalize on new ways to use technologies such as machine learning to generate more insights from data and make better business decisions. You’ll make changes to ensure your company’s AP processes and payments become better protected from cyberattacks. All that good stuff – and more – is headed your way in 2021.
To help make you and your company flourish next year, we’ve prepared this outlook of trends to watch in 2021
Trend One: More Invoices Will Be Received Electronically Next Year
If there’s one thing we learned from 2020, it’s that demand for automating AP processes is growing. It’s been fueled in part by the huge number of people who shifted to remote working.
Businesses have come to realize this year – more so than ever before—that automating their payments and invoices could be done faster and more securely using automation rather than continuing to use paper.
During the economic shutdown, so much of that paper remained in corporate offices that were closed or highly inconvenient to get to. It was a major security risk and inconvenience to handle all the approvals of paper checks and invoices.
That paper process is becoming a thing of the past. Automation is taking center stage. This is a key takeaway from a new survey from the Institute of Finance & Management (IOFM), a provider of AP education and training.
The survey of 300 AP departments – that had processed 147 million invoices between 2019 and 2020 – reveals that 66 percent of invoices are now received electronically. That’s a big jump from the 55 percent last year and 44 percent in 2018.
Jess Scheer, IOFM’s executive editor, believes that in 2021 more than 70% of invoices could be received electronically.
73 percent of respondents use an automated AP system
In sync with these trends, the survey finds that nearly three fourths (73 percent) use an automated AP system, up from 66 percent last year and 45 percent in 2018. “Organizations realize there are delays dealing with paper invoices, there are duplicates and there are redundancies,” said Scheer. “And they can get paid faster because those invoices can be submitted directly into the automated systems.”
Scheer said that 2018 and 2019 marked a pivot point— the first time the majority of surveyed organizations use AP automation. “In part this acceleration has happened because of the health crisis but also because of the steady realization over the years that automation drives efficiency,” he said.
Trend Two: Expect Ongoing Challenges Integrating AP and Accounting Software
Next year you’ll notice more companies than ever will be collaborating to integrate more AP automation software, accounting software and Enterprise Resource Planning software.
The purpose of these collaborations will be for companies to successfully blend these systems to provide faster and easier ways for finance pros to use automated payment processes. But the integration process will be a key challenge next year – as it has been for the past several.
AvidXchange’s survey this year of financial professionals finds that only 35% of businesses are leveraging fully integrated systems to manage their financials. And more than 75 percent of finance teams are relying on at least two, and sometimes four or more different applications, to govern critical day-to-day processes which can take a toll on efficiency and productivity. There’s other research that emphasizes the challenges with these integrations. An article in Finance Digest, titled 5 Common Mistakes Around Accounts Payable Automation, advises to avoid integrating a solution that “does not communicate natively with your accounting
software or Enterprise Resourcing Planning.”
A collection of application programming interfaces (APIs), connectors, interfaces, micro-services and configurable modules may indicate the integration is too complex. Make sure you have the right tools set up and that they all talk to each other before you make a decision.
A Sage Intacct report echoes these sentiments:
“No matter how good an automated accounts payable solution is, if it doesn’t integrate with your legacy finance systems (ERP)—the financial nerve center of
an organization—you will still experience the same pain points that led you to automating in the first place like enormous amounts of time spent manually re-keying information, retrieving invoices, and error-prone audit processes.”
Trend Three: Urgency to Automate AP Will Intensify
In recent years, many CFOs have been hesitant to automate AP because they haven’t been convinced it’s an urgent need. But next year they’re going to sense
that urgency more than ever.
Because more of them will understand and resonate with the idea that automating their AP process can help them adjust faster to these surprising redirections of
funds and market fluctuations, and can save money and time during economic times that are so demanding of those benefits. An AvidXchange survey revealed that 84 percent believe emerging technologies would help them work more efficiently, now and after the pandemic.
A report by Ardent Partners, a research and advisory company, titled The State of EPayables 2020, elaborates on this matter of urgency in the context of AP processes and the new economy now forming. “In 2020, the accounts payable profession continues to gain momentum and impact business operations and results in an increasingly strategic way. The global uncertainty that pervades today’s market indicates the very real threat of a deep economic downturn.”
“In response, the CFO’s new ‘hierarchy of needs’ has placed a laser focus on business continuity and ensuring the liquidity needed to fund ongoing operations. Against the backdrop of a global pandemic, this renewed focus on liquidity and cash management is poised to pull AP into the limelight with an urgency never before seen.
Trend Four: The Importance of Strategic Work Will Become More Important to Financial Pros
2021 will be the year when financial pros will spend more time than ever on strategic work such as rebuilding businesses and accelerating growth by making adjustments to financing, cash flow and technology use. This idea has been reinforced by results of an Accenture survey summarized in a report titled Accenture CFO Research Global.
The Accenture report finds that 81 percent of all CFOs see identifying and targeting areas of new value across the business as one of their main responsibilities. Over three quarters (77 percent) believe it’s within their purview to drive business-wide operational transformation.
From a strategy perspective, there will be more opportunities to focus on the big picture, where the company as a whole is headed and why.
42 percent of CFOs spend at least half their time on strategic roles.
In line with this, 42 percent of CFOs spend as much as half their time in a “strategist role,” according to May 2020 survey results from Grant Thornton, an audit, tax and advisory company. That’s a 13 percentage point jump from only four months earlier, February 2020.
Agents and Strategies, also reveal a sharp decline – from 40 percent in February to 9 percent in May – in the time CFOs spend on handling transactional processes. In the arena of data analytics and generating insights, CFOs will have more time to analyze the wealth of available corporate data to develop better insights that lead to smarter business and strategic decisions. “The ability to capture, structure and make better use of data in order to increase the efficiency and
effectiveness of their own department and across the organization is the CFO’s greatest area of potential strength,” according to the Accenture report.
AP managers and controllers will also spend more time than ever on strategic work
Next year will be the most intellectually stimulating and career fulfilling ever for all of you AP managers and controllers who work for companies that automate their AP processes. Like never before, you’ll become more valued corporate leaders in guiding your companies towards a more prosperous future.
The reason for this change is simple: You won’t need to spend nearly as much time doing manual, paper-based AP processes. Instead, you’ll be free to dedicate much more time to develop your skills and accelerate your careers as financial analysts, business advisors and internal controls specialists. As business advisors, you’ll engage more than ever with business owners and clients, offering insights on how to bolster your company’s balance sheet, differentiate products and services and fine-tune operations to help the company be more productive and grow revenues and profits faster.
“The role of business advisor will result in more than 80% of an accountant’s revenue, as accountants can add a huge amount of value when they know the
facts,” said Rob Nixon, an internationally renowned accountancy expert, in an Entrepreneur.com article titled Can Computers Replace Human Accountants?
We Doubt They Can.
“The value of having an accountant – either outsourced or in house – is not in the data entry but in what they can add to your business,” according to a report in SmartCompany, a publication for growth businesses. “A good accountant operates as a strategic partner in your business, offering insight into
what the financials mean.”
Trend Five: More Use Than Ever of Data Analytics and Machine Learning
Expect to hear a lot more next year about the use of machine learning and data analytics to improve the personalization and effectiveness of AP automation services. You will notice an intensifying use of these technologies that are effective at using AP automation data to generate more valuable insights from that data to serve customers better and grow businesses faster.
In 2021, finance pros will be using all the payment, invoice, cash flow, customer and other types of data to generate more valuable insights.
Here’s the best part. These insights will lead to more intelligent business decisions such as ways to deliver more personalized payment and invoice services to customers, vendors and suppliers faster and more economically.
Data is a big deal in AP automation
To understand better why data will be more central than ever to your AP business, consider this stat: 88 percent of finance pros said data and intelligence are important or critical pieces of the AP process, according to results of an Ardent Partners survey summarized in the research company’s report titled Accounts Payable Metrics That Matter in 2020.
The survey also finds that best-in-class companies are “twice as likely to leverage data and intelligence as a means to improve stakeholder collaboration and 1.6 times more likely to use AP-related data and intelligence for enterprise cash flow analysis.”
“It demands agility. The ability to make better informed decisions across an organization can and will be game changing. AP leaders must start now to ready their teams.”
With all this attention being paid to the value of data, AP system leaders will benefit from learning more about an increasingly popular type of data-centric artificial
intelligence (AI) technology called machine learning. In the world of AP automation, the technology processes and analyzes data to detect behavioral patterns of supplier payments and invoices and predicts the likelihood of those behaviors continuing.
For example, the machine learning technology might show that a particular payment method, such as sending checks to the supplier, hasn’t been working over the past six months, and there’s a 90 percent chance this will continue if nothing changes. The checks either don’t arrive on time or not at all. Based on behavioral data, machine learning alerts the business that something needs to be fixed.
There’s considerable awareness among finance pros about the benefits of machine learning. An AvidXchange survey reveals that 43 percent are familiar with artificial intelligence and more than one-third (34 percent) know about machine learning.
Trend Six: Technology Will Help Reduce Stress Levels
The understatement of the year 2020 might be that it’s been stressful. That’s been true for finance professionals as well as just about everyone else in the world. For insights into the severity of these stress levels, AvidXchange conducted a survey this year of senior finance executives at more than 500 U.S. businesses to see how they’re holding up and what could make their work lives better.
Two-thirds (66 percent) said they have higher stress levels due to the impacts of the pandemic. Sixty percent have worked longer hours, lost sleep due to stress or have had sleep interrupted by work calls or emails.
AP automation will help relieve your stress levels by eliminating manual tasks and handling of huge piles of disaggregated paperwork. The survey supports this reasoning. More than twothirds (78 percent) of respondents said new automation technology would help to further reduce rising stress levels.
Trend Seven: Cybersecurity Threats Will Intensify
All around the business world cyberattacks are a menacing problem. What’s so troubling about this is that these attacks, when successful, siphon money out of companies and threaten their ability to stay in business. Money goes out the door and never returns. Next year you’ll hear about more cyberattacks on businesses and AP payments and processes than ever before. It’s going to get worse next year largely because so many people working on AP processes and payments will be using less secure PC and smartphone technologies in their homes than they’re used to in their corporate offices.
Cybercriminals know this and it’s a reality that needs to be faced and overcome. You should be especially vigilant about protecting your company from ransomware attacks as well as check and invoice fraud. In a ransomware attack, a cybercriminal typically sends a fraudulent email and attachment or link to a company’s finance employee. That worker mistakenly clicks on the link or attachment. The criminal then gains access to sensitive information such as personal password, bank account or social security information.
The fraudster then shuts off access for all employees in that company. The criminal demands a ransom, usually money, before giving the managers access to their
stolen data. Next year, expect efforts to prevent ransomware attacks to increase and become more effective.
Invoice fraud will increase
You want to also watch out for invoice fraud. There are several types. Sometimes a fraudster sends an invoice for a higher dollar amount than the agreed upon
amount, hoping the receiver will not notice and pay the larger sum. Sometimes criminals try to charge a company for services they didn’t provide. There are also cases when fraudsters send two invoices when only one should be sent, hoping to get paid for both.
Check fraud will increase
Simply put, whenever a person uses checks to deceive, manipulate and steal, it’s called check fraud. Here are a few types:
- Washing – using chemicals to erase information from a check
- Counterfeiting – printing checks illegally from the victim’s account
- Theft – stealing checks and using them to commit fraud
- Forgery – signing a check without being authorized to do so.
The financial losses stemming from check fraud can be considerable. The Federal Bureau of Investigation estimates that losses from check fraud total $18.7 billion annually, and more than 500 million checks are forged each year, according to a Relyco article titled Check Fraud Statistics.
Conclusion: Final Thoughts
You’re about to embark on a great business journey in 2021. There will be challenges. But you’ll be in a fastgrowing, super-cool market: automating AP processes and payments to accelerate and simplify payments and make peoples’ lives easier and more productive. All the important trend lines are pointing upward. Celebrate this. Capitalize on the opportunities. Prepare now to experience unprecedented success in the coming year. And you will.
You’ll be able to spend much more time thinking strategically and have a bigger impact on your company’s top decision makers. You’ll gain more control of what you do during your work days. Your stress levels will go down. And your work enjoyment will go up.
AvidXchange is the industry leader in automating invoice and payment processes for mid-market businesses. Founded in 2000, AvidXchange processes over $140 billion transactions annually across its network of more than 680,000 suppliers, transforming the way 6,000 customers in North America pay their bills. AvidXchange is distinguished as a fintech unicorn, with 1,500 employees supporting customers across seven office locations. For more information,
About the Institute of Finance & Management
Accounting and finance professions have each undergone nothing short of a complete transformation since the Institute of Finance and Management (IOFM) was founded in 1982 and since then our mission has been, and continues to be, to align the resources, events, certifications, and networking opportunities we offer with what companies need from the accounting and finance functions to deliver market leadership. IOFM empowers accounting and finance professionals to maximize the strategic value they offer their employers.
Our enduring commitment to serving the accounting and finance professions is unmatched. IOFM has certified over 25,000 accounting and finance professionals and serves several thousand conference and webinar attendees each year. IOFM is proud to be recognized as the leading organization in providing training, education and certification programs specifically for professionals in accounts payable, procure-topay, accounts receivable and order-to-cash, as well as key tax and compliance resources for global and shared services professionals, controllers, and their finance and administration