As a result, businesses are increasingly automating their accounts payable process to increase efficiency going into 2023. Surveys have revealed CEOs’ main goals are digitisation, growth and efficiency. All three are directly connected in post-pandemic Britain as businesses streamline processes to utilise limited resources most effectively.
The current economic climate, combined with businesses still dealing with the impact of Covid, has led to the adoption of digital technologies speeding up by at least three years, according to research.
Read on to find out about the top accounts payable trends for 2023 that are aimed at preparing your AP team for survival in the mid-term and success in the longer term.
In an era where digital transformation has been rapid, businesses are set to further replace time-consuming manual activities and paper documents with electronic accounts payable processes. Around 50% of organisations surveyed are already using Optical Character Recognition technology to read documents in the processing queue.
In addition, more than half of respondents are using an electronic invoice matching system to support AP processes. Only 15% of businesses are using artificial intelligence-based cognitive automation and 36% use rules-based robotic process automation on data-related tasks.
The indications are these numbers will increase in 2023, which is good news for the 50% of organisations that are still “pen-pushing” in the accounts department.
The significant increase in process efficiency in accounts payable suggests the general cost of operations will be driven down in 2023. However, on a more cautious note, these savings are likely to be offset by rising labour costs and a general shortage of talent.
Digital accounts payable technology has become more affordable and accessible for companies of all sizes in recent years. Studies into invoice processing efficiency between 2019 and 2022 reveal that productivity has increased by an average of 7% during the past three years.
The data shows organisations across the board have become more efficient and productive since 2019. This is “almost certainly” down to the digital transformation, according to analysts.
The impact has been greater in low and medium-performing organisations. Processing efficiency increased by 28.6% and 16.6% respectively in these performer levels. This is because typically, these organisations use fewer employees to carry out the related transactional activity.
The impact of the “Great Resignation” will continue to be felt in AP departments. It describes an economic phenomenon whereby employees are considering quitting their job.
It began early in 2021, in the immediate aftermath of the Covid-19 pandemic and lockdowns. Significant social and economic changes impacted people all over the world and thousands decided it was a good time for a career change. The main reasons included salary stagnation and the rising cost of living.
The latest figures show 40% of workers are considering resigning from their jobs. An increase in labour costs is being driven by the talent shortages and employee retention problems that have prevailed recently.
The Great Resignation has specifically impacted accounts payable costs, where salaries have increased by 20% for a senior AP clerk between 2019 and 2022 as companies strive to attract the best talent. Companies trying to get a handle on costs during the anticipated recession will be looking towards more automation to try and save money.
Accounts Payable has already seen tremendous changes since 2019 in terms of costs, but because it is a key process for every business, it must work effectively. People tend not to notice AP when it’s working well, but if it stops working, they will certainly notice the difference and everyone will know about it.
According to research, only around 30% of digital transformations in the accounts payable department are completely successful. This is because many organisations are rushing into it without having formulated a clear idea of how it will work.
Those taking the plunge in 2023 must make sure they have the correct processes in place to make it work efficiently, saving the business money and making it more sustainable. Those who miss the mark may experience a negative impact until they get it right.
Research suggests there will be an increase in accounts payable outsourcing in 2023. Many successful financial organisations have started outsourcing as part of their operating model.
The Deloitte CFO Signals survey reveals 34% of finance executives have indicated they are likely to increase outsourcing over the next 12 months in their day-to-day operations.
A top outsourcing firm will do accounts payable transactions for a living. They can do more than just perform the tasks and provide the talent. They are also experts at optimising processes to ensure the highest levels of efficiency and productivity.
They are the experts in implementing digital technology, removing the risks from these initiatives. If you have outsourced your AP activities to a professional consultancy, they should guarantee the outcomes when it comes to the delivery of your expected cost savings and ROI.
When you achieve better results for your transactional activities through outsourcing, this should lower your costs and improve your operational efficiency. It will enable you to focus on the key digital transformation projects that are the core of your business.
The idea is to allocate the resources previously swallowed up in administrative tasks into other parts of the business. By working with a professional AP provider, you can also overcome challenges such as different time zones and geographic proximity, language barriers and communication challenges.
The Great Resignation and the digital transformation will continue to impact the world as we know it during 2023. Forward-thinking finance executives will overcome these challenges by incorporating digitisation and outsourcing into their operating model to solve talent shortages and labour costs.
Once you have improved operational performance and productivity, this will enable you to start working on the goals of growth, further digitisation and efficiency.