Accounts payable automation can help small and middle market businesses

Historically, businesses have spent a significant amount of time manually processing invoices and payments. But today, there are digital automation solutions that can effectively handle these traditional AP processes with a fraction of the resources they previously required.

Big businesses are rapidly adopting automation, but small and middle market companies are still too frequently being left behind in the digital transformation.

According to the Harvard Business Review, the [U.S.] middle market is responsible for roughly one-third of private sector GDP and employment. To better put this into perspective, if the U.S. middle market was its own country, it would be the fifth-largest economy in the world. However, most of these businesses’ AP processes are still living in analog because of outdated practices like paying with paper checks. According to Goldman Sachs, 60% of all B2B payments are made by paper check and small market businesses are responsible for 80% of these payments.

Why is this the case? Finance leaders may be comfortable with the status quo or may not have realized the need for this technology prior to the pandemic. Here are two primary reasons for investing in AP automation solutions given the innate and immense value they bring to the table.

Efficiency. Processing bills and payments is a requirement for every business. Anyone can do it, and everyone does it. But how can AP teams do it more efficiently? Automation.

Automation reduces invoice and payment processing time and costs while also helping to streamline approval workflows and communication with vendors. Converting paper invoices and checks to e-invoices and e-payments reduces the number of steps it takes for an AP manager to approve and remit payment for an invoice. Importantly, it also provides business continuity and flexibility - work can be accomplished remotely and at any time through a SaaS platform. This is particularly impactful now as 77% of U.S. middle market businesses plan to allow at least some employees to work from home permanently. By helping AP teams work more efficiently no matter where they are, the vendors also are benefited by receipt of timely payments and improved visibility into cash flow.

The AP department can drive more value. It’s 2021. We live, work, and breathe in a digital world, and we’re all about saving time and money. AP automation achieves both by offering services like invoice coding and seamlessly navigating vendor payment types. These save AP team members from antiquated, time-consuming responsibilities like stuffing envelopes and making runs to the bank, giving them the freedom to work on more value-added activities to help the business better scale for growth. Furthermore, this helps transform the AP department and modernize the roles for employees, bringing small and mid-market companies and their AP teams into the future.

The grass is truly greener with AP automation solutions. Small and middle market business leaders shouldn’t be afraid to transition into the digital world and begin to make their lives and their employees’ lives easier. Hesitation to change is natural but can result in holding a company back from improving. The benefit businesses will see after implementing this innovative technology will generate long-term benefits that outweigh the short-term cost of change.