Amid ongoing economic and geopolitical uncertainty, businesses are keeping a close eye on their balance sheets going into 2024. That means taking fewer risks and prioritising cost reduction and operational efficiency. Finance leaders are monitoring cash flow and looking to gain better visibility into their cash position.  That will require businesses to continue to expand their use of back-office automation. Accounts payable processes will be a top priority because of the ability it provides to gain operational efficiencies, establish more control over payment transaction timing, and track payment flows.

Hybrid work is the new status quo

Despite all the calls for employees to come back to work, it appears that hybrid work is here to stay – especially among finance teams. In MineralTree’s survey, 68% of finance leaders said that their AP work environments are hybrid or fully remote and 72% expect that number to increase in the coming year.  In these hybrid environments, automated processes become even more critical because it’s too difficult for remote staff to physically collect invoices, route them manually for approvals, check signatures and authorise and distribute payments.

Staffing in finance continues to be an issue

Finance leaders have faced a lot of difficulty hiring qualified accounting staff in recent years and that will continue in 2024. Almost half (45%) of the finance leaders surveyed by MineralTree anticipate hiring challenges and delays. This will put even more pressure on finance teams to accomplish more with less. In response, they will need to expand their use of back-office automation to streamline their payment processes and eliminate time-consuming manual efforts wherever possible.

Vendor relationships and payment inquiries drive payment automation adoption

Critical supply chain disruptions in the last two years put a lot of focus on the importance of strategic vendor relationships. That sentiment only grew in 2023. At the same time, finance teams find themselves bogged down by vendor payment inquiries, data entry and other time-consuming, manual tasks.

Vendors are unhappy with the time it takes them to follow up on invoice status, and it remains their top pain point in the customer payment process.

Vendors want to be paid quickly and accurately and they favor digital payments. One key reason is a large majority (76% in MineralTree’s survey) believe that when buyers pay electronically, they are more likely to pay on time. This will be an important driver for more businesses to invest in payment automation as they look to solidify relationships with strategic suppliers.

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Watch out for BEC

Business Email Compromise (BEC) has become a major cause of fraud, impacting over 70% of companies according to the 2023 AFP Payments Fraud and Control Report. In this all-too-common scam, the bad actor impersonates a vendor or company executive to access financial data, request changes to banking details, and/or receive fraudulent payments.

It might be in the form of a fake invoice through a compromised company or vendor email account, or a spoofed email address from what appears to be a trusted source.  As bad actors get smarter, BEC emails are getting more targeted and personalised making them more believable and urgent to unsuspecting receivers. Companies relying on manual processes are particularly at risk, given the potential for human error, and lack of automated processes and controls.

Brian Greehan is Head of B2B Solutions, Global Payments