Automated Payments Are Crucial First Step in Broader Enterprise Digitization

AP, AR, automation, accounts payable, accounts receivable, fraud prevention

Fraudulent activities can manifest in various forms, including identity theft, payment fraud and cyberattacks.

In all those cases, legacy and manual back-end systems provide bad actors with vulnerable — and attractive — attack vectors. After all, fraudsters typically go after the easiest mark they can find. 

That’s why, as PYMNTS Intelligence shows, it is becoming more critical than ever for businesses to modernize and update their accounts payable (AP) and accounts receivable (AR) programs.

Digital transformations of all types can help firms lock down their perimeters against many of today’s most popular fraud schemes — including those that come from the inside.

This, as the U.S. Justice Department caught and charged a senior public relations executive who somehow “acquired control” of the accounts receivable department of his employer and diverted payments as part of a yearslong fraud. 

In another recent case, the U.S. Attorney’s Office for the Southern District of New York sentenced a California man who once tried to buy Lord & Taylor out of bankruptcy to years in prison for a “sophisticated pattern of serial fraud,” including telling victims that he operated a secretive family investment firm, Neviim Equity, out of offices in Beverly Hills, California. 

And that’s not even getting into the rise of highly sophisticated fraud attacks and financial scams that deploy novel methods leveraging generative artificial intelligence (AI) and deepfake manipulations. 

But firms that automate their AP or AR programs are not only taking the first step in creating a secure and consistent payments experience; they are also signaling to their business partners that they aren’t daunted by digital transformations — and are willing and able to provide some, if not all, of the transactional conveniences that modern enterprises are increasingly coming to expect when it comes to B2B payments. 

Read alsoWhy the Time for AR Automation Is Now

How Securing AP/AR Equals Securing Growth  

Automated solutions not only protect against fraud but also help protect key business relationships from changing expectations.  

As PYMNTS has reported, the consumerization of B2B payments is increasingly helping savvy firms win more business and retain their best customers. 

“The market changes over the past few years have really accelerated the adoption of digitized B2B payments, which in turn has accelerated the innovation in the industry,” Chris Lolli, vice president and general manager of B2B product, partner and client management, at American Express, told PYMNTS.

Echoing that sentiment, Shawn Cunningham, managing vice president and head of Capital One Trade Credit at Capital One, told PYMNTS that, “in general, business customers are no longer accepting of the clunky manual processes long associated with B2B accounts receivables.” 

Still, despite the behavioral sea change, research in “Why CFOs Recognize the Need to Automate AP/AR Workflows,” a PYMNTS Intelligence and Corcentric collaboration, revealed that the decision-makers are more likely to invest in digital technologies and automation for fraud and risk than in solutions for AP/AR workflows.

But the two solutions go hand-in-hand. By embracing automation, businesses can enhance their reputations, reduce financial risks, and, most importantly, ensure that their valued partnerships remain strong and resilient in the face of evolving expectations.

See more: Why B2B Tech Will Drive the Next Innovation Cycle

Automating Away Common Growing Pains 

As businesses grow and adapt to changing market conditions, the ability to scale operations efficiently becomes crucial. Automated solutions can easily adapt to increased transaction volumes and the changing compliance and security requirements they bring. 

“We just live in a world today that moves a lot faster than the legacy systems can support,” Drew Edwards, founder and CEO of Ingo Money, explained to PYMNTS.

Automated AP and AR solutions streamline internal processes, making collaboration with partners more efficient. Businesses can share data and information securely and in a timely manner when using automated solutions, and can also facilitate real-time reporting and analytics, which help identify and address issues quickly, improving collaboration with partners and clients.

“It’s incumbent upon any business to think about delivering a great customer experience and delivering the security that they need as an ‘and,’ not an ‘or.’ Neither one of those things is optional anymore, so it’s about figuring out how do you do both at the same time. Companies need to be able to walk and chew gum at the same time,” Forter Chief Information Security Officer Gunnar Peterson told PYMNTS. 

No longer is it about being forced to choose between a great customer experience or robust security. Today’s businesses, and tomorrow’s winners, need to think about achieving both simultaneously.

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