The year 2020 has brought many new normal changes to every section of society. Finally, the year is over, and 2021 is rolled out with many new promises — from vaccine to businesses getting back on track, it is expected to be a great year.
In context to accounts payable management, this year will contain various new trends. Whether modernization has been taking the high-speed or increased focus on the AP strategies, a new year has numerous opportunities for AP departments.
Accounts receivable and payable departments are the core of business growth. If your AR and AP aren’t on the right track, you can’t push your business towards success in this fluctuating economy. So, have a look at the top AP trends of 2021 and embrace them as soon as possible!
Top 7 Accounts Payable Management Trends of 2021
In 2019, automation took the limelight in the AP sector and helped companies to improve data accuracy and operational efficiency. Whereas 2020 has been all about AP modernization — many new technologies and tools have taken the centre seat. Now, in 2021, the accounts payable industry is continuing to boom with the following trends:
Work From Home Derives AP Automation
Work from home is the new way to work that offers flexibility and safety to workers. Within the year, businesses have now become comfortable with WFH and even encouraging their employees to work remotely. Companies have gained the opportunity to reduce their real estate and operating costs with WFH.
Not all businesses have good WFH experience, especially those with manual accounts payable management systems. In the manual AP process, the department sends a paper-based invoice, gets a sign of the CEO on printed checks, and then submits it to the bank. So, it is clear that the manual AP process won’t work anymore, and companies have to adopt automation without any delay.
Prominent Artificial Intelligence
With the automation acceleration, AI and machine learning utilization are also going to speed up in 2021. In the finance and accounting sector, repetitive and time-consuming tasks will be taken by AI.
At CapActix, we use cloud-based accounting software to provide remote work flexibility to our employees and clients. With new year trends, we are going to adopt more automation in routine tasks, including data entry, invoice management, payroll, bank reconciliation, and more. It will fully eliminate human errors and save time for businesses.
For accounts payable outsourcing companies like us, AI-based accounting software are essential to efficiently manage accounting tasks. AI helps outsourcing service providers to manage the huge volume of data quickly and offer their services to multiple clients across the globe.
Strategic Accounts Payable
The cash flow management will become more strategic and analytical for businesses. Due to lockdown, many companies have suffered losses, and they are very fragile financially right now. Therefore, the credit system has been reduced or embellished by many businesses.
In 2021, companies are planning to redraft their AP strategies to quickly clear their due. Prominently, pay early and reduce operational costs are the two main strategies that AP departments will be following in the prevailing year. Additionally, AP professionals will be looking for a way to increase revenue, such as obtaining cash rebates from virtual cards. Overall, AP departments need to reform their strategies to pull companies out of the hard times.
Resurface of Cash Transactions
During the pandemic, many business industries are struggling to survive, like tourism and hospitality. Many hotels and restaurants had to permanently close their doors amidst the pandemic. That’s mainly because they don’t have sufficient cash in hand to run their daily operations.
Therefore, cash transactions are going to be more prevalent this year. Moreover, cash rolling in the market has nearly stopped, and global stock exchanges are still reviving from the COVID-19 attack. So, through strategic B2B payments, supply chain finance, and many other strategies, liquidity levels will be maintained by businesses.
Increased Invoice Management
At the moment, companies are in saving mode, and they are looking for innovative ways to lower down their operational costs. And, hiring gig workers is the new way to save money in 2021. As businesses are becoming acquainted with remote workers, they are planning to hire more freelancers rather than full-time employees to save money.
With a growing number of freelancers, the invoice volume will also increase. So, AP managers need to formulate a new digital invoice management system to accommodate a large number of invoices.
The accounts payable department holds critical information on cash flow, outstanding liabilities, spending ability, and more. All this information is valuable for finance and accounting departments to create a yearly budget. Considering last year’s slowdown, this data will help finance teams to revive the business’s financial health.
For the organization that is already using an automatic AP system, it will be easy to view and analyze AP data for business insights. With the emergence of AP analytics, the need to extract and manage AP data will automatically increase. Now, companies will invest in AP data collaboration more.
Remote working has might helped companies floating during the lockdown. But, it has increased the cybersecurity issues more. For the financial industry, cybersecurity has always been a sour topic. Nowadays, when invoices are shared online, and payments are made digitally, the cybersecurity problem has become more vigilant.
Therefore, not only AP departments but all other financial departments need to tighten their security loopholes. And, cloud technology is the best solution to maintain remote workflow without compromising security. So, cloud accounting software is going to be a highlight for 2021.
In 2021, you should be prepared to see many accounts payable management trends. However, along with the new trends, numerous old trends will also keep on evolving, as an increase in the demand for accounts payable outsourcing services and more.
CapActix has already adopted the latest AP trends, so for future-oriented accounts payable services, contact us anytime.