Businesses Embrace Managed Services to Drive Increased Automation in AP
While the pandemic caused significant, ongoing challenges across business operations, nowhere in the back office was its impact felt more acutely than in Accounts Payable (AP). That’s because of AP’s strategic role in paying vendors on time and ensuring strong relationships to ensure access to business-critical resources. And business executives continue to put pressure on financial leaders to pay vendors on time to keep goods and services flowing.
Historically, businesses have addressed operational issues by adding headcount. However, this is not a viable option today given the shortage of solid candidates, rising wages, and prioritisation of customer-facing hires. For those that are able to fill their open roles, many still struggle to solve the inherent inefficiencies and unnecessary costs of manual AP processes.
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ePayments play an integral role in AP automation because they deliver significant benefits to both buyers and suppliers by way of operational efficiencies, speed of payment, financial visibility and cash flow control. Yet, adoption creeps along. One of the biggest obstacles cited by finance professionals centres around their perception of the time and effort it takes to set up ePayments, including contacting and enrolling vendors.
Managed services: dividends for both buyers and sellers
Some AP solution providers are addressing this obstacle by adding ‘managed services’ to their offerings and it looks like it will add big dividends for both buyers and sellers. Managed services take on the time-consuming administrative tasks involved in executing payments, onboarding vendors, updating payment information, responding to inquiries, and resolving payment questions. They allow both buyer and supplier finance teams to work more efficiently and focus on finance priorities, while also strengthening supply chain relationships.
As an extension of the finance team, AP solution providers can not only help drive more ePayment spend today, but also expand the benefit as more vendors sign on in the future. The solution provider can also help the finance team maximize savings by optimising the payment mix and encouraging virtual card adoption to increase rebates.
As part of their managed services offerings, AP automation providers can also handle the intake of payment details from vendors, including bank account information for ACH payments. This removes a key administrative burden from AP teams, freeing up time to focus on other priorities. Because these providers often employ rigorous process controls and protocols to safeguard sensitive information, they also help mitigate fraud risks.
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By GlobalDataAP Automation + managed services
Additionally, managed services providers handle all vendor inquiries, so the AP team doesn’t have to – removing a major time sink from operations. This gives AP teams more time to focus on core functions and identify strategic payment opportunities. At the same time, because managed services providers are focused on vendor services, they can respond promptly to inquiries, helping to increase vendor satisfaction and improve relationships.
AP automation, combined with managed services, is a no-brainer for AP teams trying to do more with less, and stay afloat amid supply chain volatility. It handles common AP headaches for overtaxed, often understaffed AP teams while elevating productivity, visibility, control, savings – and even earnings.
