When it comes to invoice workflow automation—AP automation—a lot has changed for mid-market companies since we first started following the Levvel Research (formerly PayStream) annual payables report several years ago. For one, automation is being adopted more widely, particularly by mid-market firms. We have noticed this exponential adoption trend at Yooz. As I reflected about in my recent blog, Five Conferences in Five Weeks, at the end of last year, it was apparent that finance and accounting professionals are now accepting that AP automation is a good thing, not something to be afraid of. That is certainly a big shift from a year ago.
Another indication of the trend towards automation is the sheer exponential growth and demand for solutions that were previously only accessible by enterprise firms. This has resulted in an increased level of interest and ultimately adoption by mid-market companies. We witnessed this trend first-hand during our panel session at the Sage Intacct Advantage 2018 conference where the questions from the session attendees were thoughtful, educated, and more advanced than even just since last year. Finance and accounting professionals are better prepared when searching for AP automation providers and better able to articulate their needs, business goals, and expected results.
One of the most compelling opening remarks in this year’s Levvel Research 2019 Payables Insight Report lies in the report’s executive summary, which I think is a perfect representation of the direction that AP automation is going:
“One of the most effective ways to improve an organization’s bottom line is to decrease the cost of operations that do not directly contribute to profit, redirecting the freed resources towards strategic, profit-generating initiatives. Automating accounts payable (AP) processes is a perfect example of this opportunity, as it not only reduces the footprint of a high-cost administrative department, but it also creates an opportunity to generate revenue through increased efficiency.”1
Mark Brousseau, Institute of Finance Management (IOFM) AP automation subject matter expert, speaker, and consultant agrees. In a recent podcast he talks about the future of AP automation:
“It will be unrecognizable! Digital, data driven, and strategic. Stakeholders will unlock the value of AP automation and leverage it in more ways than ever. Instead of continuing to ask, ‘How do we manage this ever-growing pile of invoices?’ CFOs will instead ask, ‘Where do we stand with working capital so we can more accurately forecast cash, manage budgets, and mitigate risk?’ All helping drive larger corporate objectives.”
This restates the idea we have been introducing into the AP automation market since almost the beginning of our business: Essentially that you can turn the AP department into a “profit center” and impact the bottom line. And human resources can become more strategic, shifting from a “data-entry” role to more strategic responsibilities, like negotiating early payment discount thanks to the shortened cycle time. This is part of our mission statement and we talk about it a lot in our customer communications, educational webinars, and researched-based reports.
In Part 2 of this blog series, we’ll talk specifically about some of the changes now and on the horizon for AP automation.