61% of CFOs Cite Transparency Gains as Perk of AP/AR Digitization

Low visibility into payments journeys has left accounts payable (AP) departments vulnerable to cyberattacks. Throughout the pandemic, businesses’ remote workspaces have been plagued by fraud concerns and a need for tighter cybersecurity procedures in their accounting departments. Most AP departments have received at least one suspicious invoice.

These problems are rooted in paper-based systems, as human error makes manual processes far more prone to fraud than automated ones.

To help solve these and other problems, 61% of chief financial officers (CFOs) said they expect digitization to improve their AP and accounts receivable (AR) processes’ transparency, according to the AP Automation Tracker, a PYMNTS and Beanworks collaboration.

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“Invoice and payment processing that are paper-based are highly difficult to track, so it is much more likely for someone to mistakenly or intentionally pay a fraudulent invoice,” Beanworks CEO Catherine Dahl told PYMNTS. “Lack of visibility into payment activities can also lead to more frequent duplicate payments or higher chances of check or [wire] fraud.”

Improving Risk Management Capabilities

In the absence of digital tools, some companies have been trying to adapt to the shift to hybrid, remote-hybrid and remote work by using workarounds that pose compliance and security problems.

Read more: AP Automation Is Going for the Ecosystem Play to Take the Hassle out of Hybrid Work

Companies with fully automated AP processes, on the other hand, are more likely than average to feel very confident in their fraud prevention. Automation ranks first in ways to improve cybersecurity, with finance leaders saying it would make their companies less susceptible to ransomware and other attacks.

“Once organizations adopt an AP automation solution, they greatly improve their risk management capabilities through improved visibility, tracking and controls over the invoice and payment processes,” Dahl said. “Increased visibility leads to many benefits, including fewer duplicate payments [and] lower risk of check/[automated clearing house] fraud as well as improved efficiency for employees and lower costs to the business overall.”

Remaining Competitive in an Increasingly Digital Marketplace

PYMNTS research has also found that together with helping prevent fraud, digitizing payments processes also helps businesses reduce friction and minimize operational costs, improving customer retention and avoiding supply-chain disruptions.

Many businesses digitized their AP and AR operations during the pandemic as manual processes became difficult or impossible to conduct. What began as a necessity for survival quickly evolved into a convenient and efficient way to speed up payments and bolster customer relationships.

Now payments automation appears increasingly inevitable, and the growing demand for transparency and greater efficiency is expected to drive the global AP automation market to $2.5 billion this year and $4.5 billion by 2026.

To remain competitive in an increasingly digital marketplace, CFOs are incorporating automated payment processes into their billing systems rather than risking the loss of clients to tech-savvier rivals.