Paying bills is a necessity of doing business. Bills represent money, time and manpower – the effort organizations spend tracking invoices, arranging payments and recording costs for accounting purposes can be a large burden if it isn’t optimized.
The rise of digital technology brought about a major sea change for accounts payable (AP) operations that transformed the AP process and allowed forward thinking organizations to take AP from a back-office function to one that offers strategic advantages.
What brought us to this point? Here we take a look at the changes that have occurred over the past few decades to take AP from a necessary function to an important contributor to the financial health of an organization.
In the Beginning
Through the 1980s, AP was largely a manual, paper-based role. Invoices were printed by vendors and delivered (by hand or mail) to the customer. Needless to say, this caused many complications. Invoices could be lost in the shuffle, especially when any employee could receive a bill. Invoices could sit on desks or in drawers for days or weeks, never to land with the appropriate person. The result was lost invoices, missed payments and poor vendor management.
Advanced AP organizations attempted to standardize the process – attaching routing sheets to invoices, standardizing check runs, and establishing controls over the process. Even then, the weaknesses of a paper-based system couldn’t be eliminated.
Rise of Technology
By the 1990s, the boom of affordable computers and software led to a widespread tech adoption. IT departments began to pop up in organizations of all sizes, and software systems began to open up new possibilities for business processes. With this shift, standardized processes grew and AP began its move towards automation. AP departments became more centralized and focused on reducing the cost and labor necessary to manage their operations.
Of course, at this point billing was still largely paper-based, and while better AP controls cut costs, there were still major hurdles to jump before technology could help manage the entire AP process.
The Birth of Automation
By the turn of the millennium, cloud technology and software as a service (Saas) had arrived. With a new software delivery model untethering organizations from desktops, the SaaS industry exploded.
AP automation was a natural fit for the SaaS model. Invoice processing, approval workflows, and even payments could now be managed in a third party service, while organizations still maintained strict control.
Paper invoices were no longer a requirement, and as the available payment options continued to grow, paper checks were no longer the gold standard – organizations and vendors now had access to cheaper and more efficient solutions.
Which brings us to today. Anybill launched in 2001 – since then, technology has continued to advance at a rapid rate. Mobile technology is nearly ubiquitous. An estimated 74% of organizations use or plan to use Bring Your Own Device (BYOD) policies, and employees bring their company laptops home and on the road. Automating AP is now a major priority for many organizations. The cost and labor savings are still there, but increasingly it is a natural step in modernizing business and untethering from a cumbersome AP process.
BYOD adoption has enabled workers to hold meetings and give presentations across multiple locations, check their email on vacation, and keep on top of deadlines as they travel. AP professionals now have the same opportunity to easily manage AP from any location.
In addition, with all the options available, organizations are now fully enabled to make their vendor relationships a strategic part of their business. Dynamic discounting, preferred payment networks and increased flexibility for vendors are all factors that can take the vendor-customer relationship to the next level.
One of the biggest upcoming trends in the AP space is going to center around payments. An increasing number of payment options will allow organizations to further shift away from paper checks, and pay their vendors faster and more efficiently than ever before. Innovation in payments will bring about big movement toward these electronic options – what remains to be seen is the rate at which these options will be adopted in the United States (we are far behind the European Union and many other nations when it comes to adopting e-payments).
At Anybill, we’re monitoring for future developments and trends to evolve with current technology and make payments more efficient.. We’ve seen a huge shift in technology in the past decade, and in ten years the landscape could be completely different. Whatever happens, we’re prepared to grow and adjust with the changes!