Accounts payable (AP) is an account within the prevailing ledger that describes a company’s commitment to pay off short-term debt to its suppliers or creditors. The AP process is essential for all businesses which need to be handled carefully.
Accounts payables are an outstanding figure in a company’s balance sheet. If AP extends over a prior period, that means the company is purchasing more goods or services on credit, rather than funding cash. If a company’s AP reduces, it means the company is paying on its prior period debts at a faster rate than it is purchasing new items on credit.
Accounts payable administration is decisive in managing a business’s cash flow. Thus, certain trends will improve the efficiencies to manage AP processes easily.
Including the future of accounts payable, progressions in technology continue to change the business landscape. Usually, accounts payable is handled through manual processes, although the trend is quickly changing. Go through this blog to know the top trends in accounts payable for the year 2020.
- Recordkeeping and data entry is essential for all businesses, especially while processing accounts payable. Big data is no longer just a buzzword, it helps to transform a business with insightful and predictive analytics.
- The accounts payable department has a unique advantage because they consist of massive, yet meaningful financial data.
- Discovering alternatives to leverage this data enables you to see not only current trends in the marketplace but also to distinguish future trends. This can strengthen your entire business.
- Additionally, by leveraging the available big data, accounts teams have the potential to ultimately transform their organization’s AP process.
- Through examining the time taken to support an invoice or the amount of data entry mistakes over a given time period, AP teams will obtain insights into the overall representation of the department with a view to improving processes.
Automation and cloud computing
- According to Statista near about 64% of small business owners use some kind of software to accomplish accounting tasks. With the emergence of AI (Artificial Intelligence) automation is trending.
- In fact, automation and cloud computing are greatly beneficial to complete accounts payable accurately.
- Besides, cloud technology is a cost-effective solution to accomplish accounting and finance tasks as it allows users to enjoy a subscription-based service model.
- Companies who switched to cloud-based accounting software can significantly improve their overall revenue. Moreover, as per a survey, more than 75% of companies will shift to cloud computing by 2020.
- Automation plays a vital role in simplifying work processes, streamline accounting operations, and save time.
- In short, automation and cloud computing present real-time insights into the company’s finances and accounting payable operations. Also, the managers can access the software remotely, so invoices always get evaluated and paid on time. Hence, it will be trending in the future.
Outsourcing of accounting operations
- Many businesses prefer to focus on their core competencies rather than investing in building an in-house team for secondary functions. Hence, they opt for outsourcing options.
- Accounts payable outsourcing enables smaller businesses to converge on their fundamental operations.
- Generally, outsourcing accounting can aid these businesses in decreasing costs, reducing the chance of fraud, and granting access to accounting professionals whenever required.
- Thus, more and more businesses will be favoring to outsource AP processes for efficient results and to focus on primary business operations.
Fraud prevention tactics
- Fraud prevention will continue to be a prime concern for most companies. As the accounts payable handles the sensitive financial data, the organizations will employ tactics to prevent fraud.
- Nevertheless, the report also found that companies are acknowledging the significance of fraud prevention and are commencing to put systems in place to prevent it. These tactics include preventative measures and upgraded security policies.
- However, as online fraud is prevalent, companies are becoming more alert to minimize the risks. So, they will look for secure and most efficient accounts payable services.
Despite the challenges associated with accounts payable processes, companies can efficiently handle accounts payable with these trends for 2020. As new technology is emerging, they will get enormous benefits to complete the accounting process. 2020 could be the year that AP certainly transforms its correspondence with the upcoming trends.
As accounts payable is a crucial task for a company, it should be handled by experts. Most of the time, businesses prefer to outsource the requirements instead of building an in-house team of accountants to save on costs and resources.
Munimji KPO is one of the leading accounts payable outsourcing service providers in India. We have seasoned employees who can deliver you the most accurate results in the stipulated time frame. From monthly AP statement processing to the analysis of unbilled supplies, Munimji KPO offers comprehensive accounts payable services for all businesses. Connect with us to get more details!