In today’s fast-paced business environment, traditional accounts payable processes pose significant challenges. Manual systems are often inefficient, leading to errors, delays, and increased operational costs. As the 2023 recession loomed, businesses turned to new technologies to redefine their workflows.
Automation, artificial intelligence (AI), and blockchain are transforming how businesses manage their payables. These innovations streamline workflows, enhance accuracy, and provide real-time visibility. This blog will explore six key accounts payable trends that will shape businesses in 2024 and beyond.
According to Future Market Insights, the global accounts payable automation market was valued at USD 2.3 billion in 2021, with a projected compound annual growth rate (CAGR) of 10% from 2022 to 2032
Under Section 43B(h) -Business enterprises are required to pay MSMEs within 45 days, as per section 15 of the MSMED Act, 2006, depending on the presence of a written agreement. In case there is no written agreement, payment should be made within 15 days
Key Accounts Payable Trends to Drive 2024
1. Automation
Manual accounts payable processes are often cumbersome, resulting in piled-up invoices, frequent errors, and processing delays. In 2023, many companies adopted automated AP solutions to streamline invoice processing, reduce errors, and speed up payment cycles. Automation saves time and resources, enhances accuracy, and ensures compliance in financial management.
Looking ahead to 2024, AP automation will continue to evolve rapidly. Businesses will increasingly use machine learning algorithms and predictive analytics to forecast cash flow and optimize payment schedules. This trend will make accounts payable not only efficient but also predictive and strategic.
Ensuring Efficient Accounts Payable:
- Streamline invoicing processes.
- Implement automation for data entry and approval workflows.
- Negotiate favorable payment terms with vendors.
- Regularly reconcile accounts.
- Employ technology solutions to enhance accuracy and speed.
2. Real-Time Payments
Traditional payment methods often lead to extended payment cycles, human errors, and cash flow issues. In 2023, businesses began adopting real-time payments to address these challenges. Real-time payments offer faster, more efficient transactions, reduce processing delays, and optimize cash flow.
Real-time Gross Settlement is a funds transfer process generally used to transfer higher amounts. It is a safe and secure way of transferring money as the settlement takes place in real time. An RTGS transaction is free of charge when done online and is initiated, cleared, and settled in real-time, usually within 30 minutes, making it one of the best, free, and fastest ways to transfer high amounts of funds instantly
In 2024, this trend will gain further momentum. Businesses will benefit from integrated real-time payment systems, enhanced security measures, and expanded accessibility, enabling quicker and more precise financial transactions.
3. Cloud-Based Solutions
Manual AP processes are plagued by inefficiencies, errors, and delays. In 2023, businesses increasingly migrated to cloud-based AP solutions to streamline workflows, enhance accuracy, and enable real-time collaboration. Cloud-based systems also offer accessibility from anywhere and significant time savings.
In 2024, this trend will evolve with advanced features, including enhanced automation, machine learning integration, tighter security measures, and greater customization and integration with other systems.
4. ERP Integration
Siloed systems, fragmented data, and manual processes have traditionally complicated accounts payable management, leading to duplicate entries, data discrepancies, and delayed payments. In response, businesses have adopted ERP integration to unify financial data management, automate routine tasks, and facilitate real-time collaboration. This integration improves accuracy, accelerates approval processes, and enhances decision-making.
In 2024, ERP integration will offer even more features. Businesses will benefit from deeper integration capabilities, AI-driven predictive analytics, and enhanced mobile accessibility, using these systems to derive actionable insights for strategic financial planning and forecasting.
5. Supplier Self-Service Portals
Previously, manual invoicing, delayed payments, and cumbersome supplier communication were major hurdles. The adoption of supplier self-service portals has proven effective. These portals provide suppliers with real-time access to invoice status, payment details, and communication channels, reducing the burden on AP teams and improving transparency and vendor relationships.
In 2024, supplier self-service portals will advance further with enhanced customization, AI-driven insights, and seamless ERP integration, ensuring a future-ready and resilient accounts payable process.
6. Cybersecurity and Fraud Prevention
The surge in digital transactions and remote work in 2023 underscored the need for robust cybersecurity and fraud prevention in accounts payable. Businesses adopted advanced encryption, multi-factor authentication, and AI-driven anomaly detection to protect financial data, mitigate risks, and ensure compliance.
As we move into 2024, the emphasis on cybersecurity will intensify. Real-time monitoring, enhanced encryption protocols, and machine learning algorithms will become standard. Companies will integrate blockchain technology, biometric verification, and behavioral analytics to defend against sophisticated threats.
Accounts payable trends are shifting from traditional manual processes to advanced automated solutions, streamlining workflows and reducing errors. In this evolution, collaboration with external providers is crucial. Delegating AP functions to specialized vendors leverages their expertise, enhances efficiency, and ensures compliance.Finsmart Accounting is an experienced finance and accounting company specializing in accounts payable services. We offer you advanced and innovative solutions for all your accounting needs. Contact us today and learn how we can help you in innovating your accounts payables.
Founder & Director
Shalaka Joshi, a Chartered Accountant passionate about outsourcing and problem-solving, brings over 20 years of extensive experience in accounting, payroll, and MIS reporting to her professional endeavors
