The world has changed. The future is still bright.
Not long ago, we were frantically searching for the final items on our Christmas lists. Earlier this year, grocery shelves full of household necessities like toilet paper and hand soap were barren. The coronavirus, also known as COVID-19, interrupted business operations at a rate unmatched since the last World War.
While we all hunker down in our homes (for a second time) and try to maintain social distancing, the world around us is still reeling from the effects of the quarantine. Operational inefficiencies that were once dubbed "long-term projects" have become glaring liabilities, leaving even the largest of companies looking for ways to implement temporary "duct tape" solutions - without sacrificing control and security.
Few finance professionals realized just how antiquated their AP processes were until the coronavirus started closing offices around the globe. Paper invoices have been sent to empty buildings where they’ll likely remain until the threat of infection is over, and payments may not be going out on time – if they’re going out at all. The coronavirus has left AP departments asking important questions.
How do you process paper invoices and print paper checks if you can’t enter the office? Perhaps more importantly, what happens if the post office shuts down or puts non-essential parcels on the back burner? It could be months before invoices and payments are delivered without a concrete business continuity plan in place.
We may not fully understand what payments processes will look like when we all return to the office, but one thing is for sure, change is on the horizon. A brief look into the past, confirms that much.
Other global events, frequently dubbed Black Swans, have propelled large-scale change in a variety of industries. It happened after the Great Depression, after every World War, 9/11 and the housing disaster of 2008. In every instance, the primary catalyst for the accelerated implementation of mass change was the innate universal responsibility to ensure that similar situations never happen again. So, what can we expect for the future of payments?
A Better Tomorrow
To put it simply, a better tomorrow. For far too long, finance professionals and AP departments have had advancements in payment processes and integration of automated solutions on the back burner. Time and time again, we’ve looked at our paper invoices and our printed checks, stuffed them into envelopes, sealing and mailing them, and said, next year, we’ll find a solution for this. No more. The coronavirus has forced us to look with clear eyes and open minds at the processes in place today. The payments process for many businesses could use an upgrade. If we, as finance and payables experts, had paid more attention to the shift in the industry towards digital/ automated AP, we may have been more prepared for this crisis.
No Touch Payments & Invoicing
The good news is that it’s not too late. AP automation, eInvoicing and payment digitization are easier to implement than ever before. With seamless integration into ERPs and accounting systems and instant access to invoice approval and payment information, AP departments could be functioning at peak efficiency from a boardroom or a basement in less than 30 days. No touch payments – at the click of a button – at any time, from any place. If it takes a Black Swan to drastically improve our processes, increase our protection against fraud and enhance the lives of finance professionals, then at least some good came of it.
The critical thing to remember is that change doesn’t happen overnight. Some of these improvements will take time. But they will happen – and sometimes much more quickly than you would think -- and on a global scale. In Europe, contactless payments have already replaced other payment methods. It’s crucial to our success to be prepared to learn from our mistakes and improve through the pain. While we’re all reflecting on ways to improve our AP processes and pave the way for a brighter future, let’s look at the top priorities for finance professionals while we’re quarantined and upon our return to work.
There are 3 big changes in the immediate future for B2B payments.
The phrase “Don’t put all of your eggs in one basket”, has never been more relevant. Only now, as AP departments scramble to find solutions for off-site check printing and invoice handling, are enterprises realizing that handing everything in-house may not be the best idea. Finding a partner for backup check printing and invoice processing is mission-critical for AP departments moving forward. With a solid backup plan in place, should businesses shut down, or other unforeseeable events derail normal AP processes, business continuity will remain intact. The best part is, these contingency plans can be integrated into current payment processes without forfeiting an ounce of control.
AP automation has been around for over a decade. While some corporations have fully automated their processes, the majority of AP departments around the world are still handling things the not-so-good old-fashioned way. That means a lot of paper and a lot of manual processing. A fully automated AP department does not need to visit the office to approve invoices and issue payments. They have a cloud solution that handles that for them. All they need is a device with an internet connection and an AP automation solutions provider. Accounts payable automation cuts costs by over 80% on average, while streamlining approval processes and generating revenue. The race to automation starts now for many businesses. Don’t get left behind.
No Touch Payments
The paper check is still an integral part of finance operations in most successful enterprises today, despite the fact that it’s the costliest and most time-intensive payment method with the highest risk of fraud. Look for that to change in the coming months. PYMNTS.com’s CEO, Karen Webster, recently interviewed our COO, Julie Negrete-Anderson, about what it will really take to kill the check. Experts believe we have our answer, COVID-19.
No touch payments are the way of the future. Why are we still issuing checks anyway? When’s the last time you saw a check outside of your finance department? The paper check has long been dead in consumer payments. Before this outbreak, we anticipated the check to be a bygone in B2B payments by 2030. Expect that to happen a lot sooner in a post coronavirus society. Businesses will look to immediately cut ties with outdated payment methods in favor of more reliable and more secure electronic payments. The check had its day (a lot of them). Look for payment types like ACH, virtual cards, wire transfers and real-time payments to lead the world of B2B payments in the not too distant future. The check has officially been quarantined.
A better world.
It can be difficult at times for business professionals (and people in general) to pull themselves out of less than ideal situations and see the silver lining. The Black Swans of the past were all awful for a time. But we as a society and an economy arose bigger and better than ever before. The crisis of the coronavirus is no different. Businesses will bounce back. We will emerge from our homes with a new appreciation for our morning commutes and maybe a new hobby or two. And for B2B payments, this may be the best thing that’s ever happened.
The future is here. The future is bright. And it wears a familiar face.
Welcome to AP Automation.
For more information on the future of B2B supplier payments, check out our brand new guide: The Ultimate Resource for AP Automation & Best Practices