The gig work revolution was well underway when the pandemic struck. And like so many things, developments that were moving at a leisurely pace, it suddenly needed velocity. That’s true in terms of getting gig work solutions to market, and as a core characteristic of those solutions.
Add accuracy and security to velocity and it makes a kind of “rule of threes” for the payments space today. As legacy systems — bane of gig workers and the companies that engage them — are increasingly upgraded and replaced, those three system attributes will be more prized still.
In addition to platforms connecting gig workers with companies looking for them, “Companies must also make sure they can quickly pay their freelancers, which involves reconciling the amounts requested with the services provided and listed on invoices,” the Tracker states.
“Many still use manual invoicing systems that can slow payment processes. This was frustrating to gig economy workers prior to the pandemic, but slow payments could become serious problems during the resultant economic downturn, leading to financial stressors such as the inability to pay bills. This means that tools capable of speeding payments and invoice approvals are critical.”
‘Close As Many Loops As Possible’
Interest in cloud-based payables automation was hot before the pandemic. Now it’s being seen as a critical systems upgrade, especially among small and medium-sized businesses (SMBs) struggling to optimize every transaction.
“The biggest payables issue during the COVID-19 era — not only with invoice processing but also payment processing — is that if it is not happening in the cloud, it is going to be a headache for the organization. Finance and accounting teams no longer need just to be paperless, they are office-less ... Invoice coding, approvals and executing payments, as well as all the other payables processes, need to be online,” Tipalti CEO Chen Amit told PYMNTS.
“[Companies] need a payables operation that closes as many loops as possible and minimizes the need for multiple point solutions. [Optical character recognition] and document management for invoices without both a supplier portal and an integrated, auditable approval process is just another point of potential failure,” Amit said.
“Businesses must establish touchless interactions with suppliers and banks. The good news is that once it's in place, you'll never have to go back to the old world.”
Escaping the “old world” of banking has never seemed more appealing, as literally millions of SMBs struggle back to operational posture and look for new paths to profitability.
But close to 60 percent of U.S. companies are “… lacking invoice workflow automation in their approval processes. Finalizing these invoices and ensuring that funds sent match the amounts owed must thus be handled manually, which often results in delays,” the Tracker states.
Manual Reconciliation, Begone
Among the most consistently troublesome of manual processes is reconciliations, which are not only slow but also notoriously error-prone. This is where AP automation is stepping in.
“The cost benefits of employing [AP automation] solutions are dramatic, as using digital payment processing solutions could help firms cut related costs by 81 percent. Third-party partners can help firms manage the cost of implementing these tools by enabling them to streamline reconciliation and save on the expense of building and testing out their own automated platforms.”
“Such partnerships will also make it easier for companies to begin more quickly approving invoices and sending out payments,” the latest The Gig Economy Tracker® states.