Businesses Cite Outdated AP Systems as Hampering Vendor Communications

Businesses of all sizes experience inefficiencies when dealing with a high volume of payables, or “mass payouts.”

Regardless of the actual volume of payables a company processes each month, organizations that lack the solutions and infrastructure to efficiently manage this aspect of their operations will soon run into obstacles that limit their growth, according to “High-Volume Accounts Payable,” a PYMNTS and Routable collaboration.

Get the report: High-Volume Accounts Payable

For this report, PYMNTS surveyed 204 finance executives in four industry segments that are coping with rising payments volumes and are under great pressure to handle more payments quicker: online marketplaces, virtual events management, gig economy and transportation, logistics and shipping.

Facing Challenges With AP Systems 

Most of the companies surveyed said their growth will be limited if they are unable to sufficiently handle the increase in payments volume they are anticipating.

That is hardly the only stress they face. Topping the list of 10 other challenges they are facing with their accounts payable (AP) systems is insufficient or inefficient communication with vendors or service providers.

Fifteen percent of the executives who were surveyed said that is their most important challenge, and another 4% said it’s a challenge they’ve experienced, but not the most important one.

The next most common challenges executives said they are facing with their AP systems are insufficient payment options, inability to make payments in currencies used by vendors and inefficient process to onboard new vendors.

Optimizing Workflows and Improving Integration 

PYMNTS research found that with the right technology, businesses can optimize workflows and improve integration between payments processes and enterprise resource planning (ERP) systems.

Technological improvements are helping companies cope with the acceleration of the pace of digitization throughout the economy as well as the number of payments businesses make to their vendors and contractors each month.

Closing the books can be a monthly ordeal for finance executives beset by paper and manual processes, Routable CEO Omri Mor told PYMNTS in an April interview. CFOs are tasked with playing historian, finding what was paid, when and why, and navigating spreadsheets.

Read more: Killing the ‘Double Whammy’ of Closing the Books with AP Automation

Business payments modernization, and payables automation in particular, can help speed things along.

“Closing the books is a review,” Mor said, almost like an audit — and that review is made all the easier with systems in place that set and trace identifiers on a payment record that is associated to a bill and tie it all together without human interaction in the mix.

A growing number of companies recognize that automating their AP platforms can help them meet the challenges presented by the rising volume of AP. Two-thirds of the executives surveyed said it is “very” or “extremely” important for their automated AP platforms to handle increased payables.