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In the modern world, relying on traditional accounts payable processes is challenging. The primary hurdle lies in the inefficiencies of manual systems, leading to errors, delays, and increased operational costs. As the recession was expected to start in 2023, businesses started implementing new technologies and trends, redefining workflows, etc.

Automation, artificial intelligence, and blockchain are revolutionizing the way businesses manage their payables. This helps gain streamlined workflows, enhanced accuracy, and real-time visibility.

This blog will explain the 6 accounts payable trends that will shape businesses in 2024 and the upcoming years.

According to future market insights, the size of the 2021 global,accounts payable automation market reached US$ 2.3 Billion, with a projected 10% CAGR from 2022 to 2032.

Key Accounts Payable Trends to Drive 2024

Here are the top accounts payable trends to watch for businesses:

1. Automation

When it comes to finance, businesses grappled with cumbersome manual processes in their accounts payable operations. Invoices piled up, human errors were common, and processing delays were inevitable.

In 2023, many companies embraced automated AP solutions. The main purpose was to streamline invoice processing, reduce errors, and accelerate payment cycles. It not only saves time and resources but also enhances accuracy and compliance in financial management.

Looking ahead to 2024, accounts payable automation trends will continue its rapid evolution. Businesses will implement machine learning algorithms, harness predictive analytics to forecast cash flow, and optimize payment schedules. In the future, integration of automation in AP will skyrocket, making the accounts payable landscape not just efficient but predictive and strategic.

How Automation Transformed AP Process in P&G - A Case Study

One notable example of how automation has transformed accounts payable processes can be seen in the operations of Procter & Gamble (P&G). As a global consumer goods company, P&G manages a vast network of suppliers and processes a large volume of invoices daily. To streamline their AP operations, P&G implemented advanced automation technologies that leverage AI and machine learning.

These technologies enabled P&G to automate invoice processing, including data capture and validation, invoice matching, and approval workflows. By eliminating manual entry and reducing human errors, automation has significantly accelerated the invoice processing cycle. This efficiency has not only enabled P&G to make timely payments to suppliers but has also enhanced their cash flow management and strengthened supplier relationships. (Source: SDLC Corp)

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How do we ensure efficient accounts payable in businesses?

Streamline invoicing processes, implement automation for data entry and approval workflows, negotiate favorable payment terms with vendors, regularly reconcile accounts, and employ technology solutions to enhance accuracy and speed, ensuring efficient accounts payable operations.

To learn more ways to improve accounts payable, read our blog,‘Top 5 Best Practices in Accounts Payable.’

2. Real-Time Payments

Traditional payment method is one of the major challenges in AP. Some challenges are extended payment cycles, human errors in transaction processing, and the associated cash flow hiccups. Realizing the advantages of real-time payments, businesses in 2023 started implementing it in their businesses.

With real-time payments, companies harnessed faster, more efficient transaction capabilities, mitigating issues of delayed processing and streamlining payment workflows. It also facilitates instant fund transfers, which reduces operational costs and helps businesses optimize their cash flow.

Fast-forward to 2024, and the trend is gaining even more momentum. Integration of real-time payment systems, increased security measures, and expanded accessibility empower businesses to navigate financial transactions with unparalleled speed and precision.

According to a report by ACI Worldwide the real-time payments for accounts payable climbed to 266.2 B with an year-to-year growth of 42.2%.

Trends in real time payments — Image 1 - Trends in Real-Time Payment Innovation

3. Cloud-Based Solutions

In 2023, businesses faced traditional challenges of manual accounts payable processes—inefficiencies, errors, and delays. The cumbersome nature of paper-based systems hindered productivity.

Businesses migrated to cloud-based AP solutions to find a transformative solution. By migrating to the cloud, businesses streamlined their accounts payable workflows. This enabled them to have real-time collaboration, enhanced accuracy, and accessibility from anywhere, and significant time savings.

In 2024, the trend is expected to evolve with more advanced features. Businesses will expect enhanced automation, machine learning integration, and tighter security measures. Furthermore, customization options and integrations with other systems are expected to expand.

4. ERP Integration

Businesses grappled with siloed systems, fragmented data, and manual processes when managing accounts payable. This has caused duplicate entries, data discrepancies, and delayed payments.

Businesses adopted ERP integration as a new trend to solve the challenges. The significance of ERP integration lies in its ability to deliver a unified platform for managing financial data, automating routine tasks, and facilitating real-time collaboration. As a result, organizations experienced accuracy, accelerated approval processes, and improved decision-making capabilities.

As per accounts payable predictions, in 2024, Businesses will expect enhanced automation, machine learning integration, and tighter security measures. Furthermore, customization options and integrations with other systems are expected to expand.

5. Supplier Self-Service Portals

Earlier, businesses were struggling with manual invoicing, delayed payments, and cumbersome communication with suppliers. Many businesses have adopted innovative solutions, including automated invoicing and approval workflows. However, the one proven and successful solution was supplier self-service portals.

Self-service portals empowered businesses to transcend traditional limitations. Suppliers gained real-time access to invoice status, payment details, and communication channels, alleviating the burden on accounts payable teams. The importance of this shift was evident in improved transparency, reduced processing times, and strengthened vendor relationships.

As we step into 2024, businesses forecast supplier self-service portals to advance further. They predict there will be enhanced customization, AI-driven insights, and seamless integration with ERP systems. This trend will not only align with the digital era's demands but also ensure a future-ready and resilient accounts payable process.

6. Cybersecurity and Fraud Prevention

In 2023, businesses grappled with the escalating need for robust cybersecurity and fraud prevention measures in their accounts payable processes. The surge in digital transactions and remote work highlighted the importance of fortifying financial systems against evolving cyber threats.

Businesses started to adopt advanced encryption, multi-factor authentication, and AI-driven anomaly detection to safeguard sensitive financial data. This proactive approach mitigated risks and bolstered stakeholder trust and regulatory compliance.

As we venture into 2024, the accounts payable trends will amplify with heightened importance on real-time monitoring, enhanced encryption protocols, and machine learning algorithms. The landscape will further evolve as companies integrate blockchain technology, biometric verification, and behavioral analytics to strengthen their defense against sophisticated threats.

AI-Powered Fraud Prevention System in Accounting - A Case Study

As a leading global streaming service, Netflix handles a vast amount of financial transactions, including payments to content creators and vendors worldwide. To safeguard against cybersecurity threats and fraudulent activities, Netflix employs advanced technologies and robust cybersecurity measures.

Netflix utilizes AI-powered fraud detection systems that continuously monitor transactions for anomalies and suspicious activities. These systems analyze patterns in payment behavior, vendor relationships, and transaction histories to identify potential risks promptly. This proactive approach helps Netflix mitigate fraud risks associated with invoice fraud, phishing attacks, and unauthorized access to financial data.

Furthermore, Netflix prioritizes data security through encryption protocols, secure payment gateways, and strict access controls. They regularly update their cybersecurity frameworks and conduct rigorous audits to ensure compliance with industry standards and regulatory requirements. (Source: InfoQ)

Essential Cybersecurity Measures for accounts payable — Image 2 : 6 Security Measures to Keep Accounts Payable Safe

Conclusion

Accounts payable trends are shifting from traditional manual processes to advanced automated solutions, streamlining workflows and reducing errors. In this evolution, collaboration with external providers is crucial. Delegating AP functions to specialized vendors leverages their expertise, enhances efficiency, and ensures compliance. Invensis is an experienced finance and accounting company specializing in accounts payable services. We offer you advanced and innovative solutions for all your accounting needs. Contact us today and learn how we can help you in innovating your accounts payables.

FAQs

1. What are the AP automation trends in 2024?

As of 2024, the key accounts payable (AP) automation trends are enhanced integration with artificial intelligence (AI) and machine learning (ML) technologies to streamline invoice processing, improve accuracy, and optimize cash flow management. There's also a growing focus on cloud-based solutions for remote access and scalability in AP operations.

2. Why are accounts payable increasing?

Accounts payable (AP) is increasing due to various factors. This includes growth in business operations, expansion into new markets requiring more suppliers and transactions, and the adoption of digital payment methods. Additionally, economic factors and inflation also contribute to higher AP volumes as costs rise across industries.

3. What is new in accounts payable?

The recent advancements in In accounts payable (AP) include the adoption of AI and machine learning for invoice processing, increased integration with cloud-based solutions for remote accessibility etc. There is also a clear emphasis on sustainability through electronic invoicing and paperless workflows to enhance efficiency and reduce environmental impact.

Rick Johnson

Rick is a highly accomplished finance and accounting professional with over a decade of experience. Specializing in delivering exceptional value to businesses, Rick navigates the complexities of the financial realm easily. His expertise spans various industries, consistently providing accurate insights and recommendations to support informed decision-making. Rick simplifies complex financial concepts into actionable plans, fostering collaboration between finance and other departments. With a proven track record, Rick is a leading writer who brings clarity and directness to finance and accounting, helping businesses confidently achieve their goals.