Next-Gen AP Automation

SMBs Embracing Cost-Effective AP Automation

Accounts payable small business

It didn’t take people long to run out of bathroom tissue (apparently) and cash, among other things, after COVID-19 was confirmed. The blow to America’s small and medium-sized businesses (SMBs) and Main Street shops came practically overnight, and was utterly devastating.

During the reopening and reinvention phase of the pandemic digital shift underway now, SMBs particularly are strapped for cash, pressured to digitize more fully, and in need of new management tools to be more efficient and make more profitable business decisions.

“Small to mid-sized businesses (SMBs) often operate with slim margins and limited resources, making it critical that they pay careful attention to their cash flows,” according to PYMNTS’ July 2020 Next-Gen AP Automation Tracker® done in collaboration with Bottomline Technologies.

“These companies require keen insights regarding outgoing payments and incoming funds so that they can best manage their spending. Easily accessible data can help them determine if they can afford to make additional investments or if doing so will cause them to miss a vendor’s payment and risk souring a relationship.”

Automation is the force making much of this business process change possible. The July 2020 Next-Gen AP Automation Tracker® contains highly relevant reporting and news of advances in accounts payable (AP) automation that SMBs are relying on for some recovery magic.

Business Cases For Cloud AP

With cash flow currently bad and access to capital possibly worse, SMBs are looking for cost-effective tools that offer quick and easy integration. Increasingly, that means “cloud.”

“A cloud approach has enabled SMBs to easily take advantage of AP automation solutions that are appropriately tailored to their workflows and volumes,” Bill Wardwell II, senior vice president of strategy, product and business operations at Bottomline, told PYMNTS.

“In many cases, these solutions are built to plug in seamlessly with SMB back-office systems, increasing ease of use and speeding time to value. Adopting solutions that automate the invoice-to-pay process should be a top priority for SMBs. Like their enterprise counterparts, SMBs will reduce costs, improve operational efficiency, and optimize cash flow management and security.”

That’s welcome news to a few million struggling businesses, as the reopening comes with new COVID-19 spikes and the inescapable sense this particular recovery requires new thinking.

Pairing Up Profitably

AP automation comes with a bevy of benefits that seem tailor-made of these times. “Faster AP processes save SMBs cash and also offer them more flexibility regarding vendor payments. Buyers with more efficient and insight-driven AP processes possess the details necessary to make informed spending decisions,” the Next-Gen AP Automation Tracker® states.

“Automating AP processes can save SMBs time processing invoices and sending funds, which then enables them to choose to pay their vendors faster. This, in turn, can earn SMBs early-payment discounts or position them to negotiate for benefits from vendors. These discounts and perks can be especially valuable to SMBs facing budget strains, but firms do not always want to pay early. Reviewing AP data could reveal to SMB buyers that the interest earned from keeping money in their bank accounts longer outweighs the early-payment benefits vendors offer, for example.”

It’s enticing, and there is intense pressure to on partner and close gaps that way. But partner selection is crucial when even small decisions are having huge consequences, good and bad.

“Businesses that see the value in automating their AP processes must decide which partners to turn to when making this shift,” per the July Tracker. “Some companies — especially larger ones that disburse high volumes and values of payments — may not be comfortable working with FinTechs if they do not have existing relationships. These businesses may instead prefer to tap FinTech solutions that are integrated into the services of the financial institutions (FIs) with which they bank.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.