B2B Payments

Bottomline: AP Automation, APIs Pay Dividends For Buyers — And Their Suppliers

accounts payable laptop

In the drive to manage accounts payable (AP) more efficiently, buyers can not only optimize their own working capital, they can help suppliers, too.

Paying suppliers in the ways they prefer, and through tech-driven platforms, means buyers cement strong supplier relationships by helping their critical business partners streamline payment receipt and reconciliation, which are still major pain points for most organizations.

That, of course, means moving beyond the paper-based invoice processes and the paper check — something that roughly 81 percent of companies still use to pay suppliers.

To that end, Bottomline Technologies Vice President of Strategy and Product Bill Wardwell said, AP automation can help.

“Accounts payable has a tremendous opportunity to transform and improve their business’s overall approach to managing finances, operations, and trading relationships,” he told PYMNTS in an interview.

That transformation begins with the earliest interactions between buyers and suppliers.

In today’s environment, Wardwell told PYMNTS, the submission of invoices from suppliers to buyers can take place across a variety of formats, from paper to PDFs to emails.

“Buyer companies need to be able to convert the data within those documents into a digitized workflow, where they can review, approve and better understand the related impact to their cash flows,” he said.

Invoice approval workflows and data must be easily integrated with a buyer’s enterprise resource planning (ERP) system, and of course the ultimate payment of those invoices must be reconciled in a way such that executives can understand transaction data in the context of revenues, expenses and overall cash flows.

Against the backdrop of those intertwined and critical steps, businesses seeking AP automation technology to help streamline at least some of those activities need to be educated about the solution features that matter most.

Wardwell said bringing all invoices — regardless of format — onto a single platform gives the buyer a more holistic view of payables and cash flow.

In an ideal deployment, automated AP processes would allow buyers to introduce new technology that gives their suppliers several options to submit invoices, enabling a streamlined process for invoice receipt, matching, approval and coding across their trading relationships.

“And once those invoices are approved, the solution should give the customer multiple payment methods to pay their suppliers without requiring multiple payment processes,” he told PYMNTS.

Security, of course, remains a critical concern. Wardwell took note of the rising incidence of business email compromise (BEC) and other fraud attempts on businesses. AP technologies, he said, must include new technologies aimed at protecting businesses, including multi-factor account authentication, and should leverage historical invoice and payment data to flag abnormal activities.

The Digital Roadmap

To get to a digitally-driven holistic view, said Wardwell, a road map must include some key considerations when a company looks at end-to-end automation.

“They need to look at the size of their organization, the industry in which they operate, the ERP system they use to manage their businesses — and they need to look at the internal structure of their company,” he said.

Automation needs evolve over time, he added, so successful tech deployments are modular and flexible in nature.

Wardwell suggested that a company might start by deploying a solution that helps with digitizing invoice data capture and approval, but where capabilities can later be added for electronic payments, or vice versa.

With a nod to the partnership model, the Bottomline Technologies VP said FinTechs have helped drive the evolution of accounts payable automation.

Looking back five to seven years ago, he said, companies would procure invoice technology from a FinTech, and would maybe get their payments processing technology from a financial institution. Now, businesses are embracing a model through which they can partner with a FinTech, or potentially with their bank — and those FinTechs are bringing a holistic solution all the way from invoicing to payment.

Wardwell identified transformative technologies for AP such as artificial intelligence (AI), enhanced mobile capabilities and better fraud detection processes.

APIs also allow payment networks such as Visa and Mastercard to more easily connect to banks and FinTechs, enabling even more businesses to make and receive payments via cards. Banks have benefited from application programming interfaces (APIs), too, as they have been able to offer accounts payable solutions within their commercial banking platforms. Lastly, end-user businesses stand to benefit significantly from APIs.

“Traditionally, you’d have scenarios where an invoicing platform or payment platform was passing batch files of invoicing data, purchase orders and payment data to an ERP,” he said. “Now, APIs have opened up the ability for those platforms to talk to companies’ ERP systems on a real-time basis.”

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