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- Accounts Payable Outlook for 2023
Accounts Payable Outlook for 2023
2023 will usher in newer innovations in AP automation and witness greater adoption by mid-sized enterprises in India.
2023 presents both a challenge and an opportunity for accounts payable (AP) teams. A combination of tepid economic growth, high pressure on the bottom line and the need to maintain tight control over cash flows will continue to place the spotlight on the AP function. As AP teams are called to do more, mid-market businesses that predominantly rely on manual or partially automated processes will lay the foundation for digitalised processes to build an operationally efficient and sustainable business. AP automation vendors are gearing up to help organizations adapt and make the leap to fully automated processes. As Zaggle maps the future of the B2B payables ecosystem, these trends would take hold:
Zero Touch Invoicing
Intelligent zero-touch invoicing will gain greater currency in 2023. Certain parts of the AP process could still require manual intervention, but a large part of the invoice-to-pay process would be fully automated. Zero-touch automation entails leveraging advanced workflows and AI algorithms to better organize routine AP processes. With zero-touch or near-zero-touch invoicing, and automation, mid-sized businesses would be able to further reduce administrative overheads and improve operating agility.
Shift to Intelligent Automation
The use of machine learning-based optical character recognition (OCR) for extracting data from invoices and simultaneous mapping to purchase orders and goods received notes for identifying exceptions is a popular use case in Accounts Payable. AP automation vendors will embed AI across the invoice-to-pay workflow. Emerging use cases include real-time fraud monitoring to reduce the risk of financial losses, supplier risk verification, and conversational AP.
Adaptive Fraud Detection
Fraud detection and monitoring. are evolving from rule-based automation to leverage cognitive automation that can auto-learn and improve performance to augment and amplify human experts’ power. Many finance teams have a baseline level of internal controls in place, such as two-way or three-way matching. AP vendors are scaling use of AI and will embed a set of advanced controls including the ability to:
- flag duplicate invoices based on the totality of information
- track changes in bank account numbers by suppliers
- risk profile suppliers to determine whether a supplier is bringing unnecessary risk and costs to its supply chain
- identify changes in supplier invoice patterns (velocity and value)
- detect delivery/fulfilment risk where an invoice specifies an unusual delivery address
The ubiquity of smartphones has created a wide base of users who interact with multiple apps using voice commands. AP solution providers are leveraging similar capabilities to differentiate offerings and deliver increased convenience. Using simple to use conversational interfaces, customers would be able to perform basic tasks including making enquiries related to outstanding and upcoming payables and approving payments.
Rise of Embedded Finance
Working capital management is critical in the unfolding economic environment. As per industry reports, SMEs in India take up a minuscule 6%-7% credit share and face a credit gap of close to $1.1 trillion. AP automation vendors in partnership with FIs will increasingly bundle credit card products with AP to enable customers to accelerate payment of approved invoices to suppliers, without impacting the cash on a buyer’s balance sheet. Embedded credit products such as secured and non-secured commercial credit cards will play a critical role in 2023, enabling companies to improve liquidity. Savvy businesses will take advantage of immediate credit lines to achieve working capital goals without burdening their suppliers and creating potential supply chain risks.
Platformification Fuels Ecosystems
Established players and new SaaS market entrants will tap into the power of ecosystems to offer complementary solutions that deliver value and differentiate their offerings. In the context of payables, this could be a 360-degree financial operations proposition, where AP software vendors function as an orchestrator of the ecosystem and bring together a range of offerings such as tax payments, compliance, reconciliation, credit products including Business EMI Cards, supply chain finance, cross-border payments, business BNPL – which are all integrated into the platform. The model would help lock in more customers. The ability to access these services seamlessly from within the same platform will distinguish these service providers.
Integration is among the top priorities for enterprises that are early adopters of financial management systems and are saddled with multiple-point systems. B2B spend management systems are complex, involving multiple systems such as enterprise resource planning, procurement systems, accounts payable platforms, accounts receivables platforms, accounting platforms, electronic banking suites, and billing subscription systems. Enterprise customers would look for systems that ease integration overheads and enable end-to-end processing and unify systems, vendors, and technologies Vendors are looking to address it by building Integration Gateways that would abstract the complexity of integration from core business layers.
Data Remains King
Current AP platforms offer limited analyses based on descriptive and diagnostic data models. Turning insights into foresight, for example, leveraging predictive algorithms will be the next natural step for rapid and sustainable process improvement. With access to the right data, companies will anticipate working capital needs to meet payment obligations, have dynamic insights to optimise invoice timing and payment terms, improve process efficiency, and prevent overspending.
Supplier Collaboration Takes Centre-stage
The pandemic foregrounded the need for managing supply chains strategically to build resilience and achieve strategic goals. Supplier interfaces to AP systems will evolve to collate vendor data in a single place, increase visibility into spend yields and help gauge the level of risk with each supplier. Some are using NLP and ML to rate suppliers’ questionnaire responses by mimicking how the customer’s analysts have previously rated similar answers. Others are using AI to analyze news feeds to link them with the correct suppliers’ record, eliminate duplications, and filter out irrelevant alerts
And reports can instantly be generated detailing a vendor’s quality of service, risk management practices, and payment terms.
Navigating 2023 with Zaggle Zoyer
As enterprises step into the new year, they need to evaluate vendors on current functionality and roadmaps for improved functionality. The Zaggle Zoyer AP automation platform offers:
- Touchless invoice processing
- AI-enabled invoice data extraction, with 2/ 3-way invoice matching
- Embedded credit capabilities
- Supplier portals with multi-lingual support
- Accounts payable KPI dashboards for effective working
- Integration Gateway for seamless data sync between 2023
Visit zagglezoyer.com to discover the power and simplicity of Zoyer.