AP predictions for 2022 revisited – part two
In January 2022, Tungsten Network sponsored a whitepaper by Ardent Partners called ‘AP 2022: Big Trends and Predictions’. This whitepaper looked at the current drivers across the industry and forecast 9 AP trends for the year ahead.
In part one of this two-part blog we reviewed four top predictions for AP in 2022:
- The hybrid workforce becomes the standard
- AP managers will develop new, flexible staffing models
- Adoption of AP automation rises sharply
- AI will significantly improve productivity
In the second part of this blog, we review five further predictions to provide updates on where things stand in 2023, and what we could expect this year.
Prediction #5: AP Becomes an Intelligence Hub
AP functions sit on a goldmine of sensitive data due to their direct access to financial documents. As such, it was predicted that AP teams would become an intelligent hub of across a typical organisation, supplying insights and knowledge that could help business leaders make more informed decisions.
In the middle of an economic crisis, companies have more need than ever to make informed decisions backed by data. This could accelerate the need for AP to become a source of valuable information and insights.
However, as new privacy laws are continually being introduced globally, this could impact the ability for AP teams to store and share data.
Prediction #6: AP and Treasury Become Strategic Partners
As data visibility is crucial in businesses today, the 2022 paper speculated that AP and treasury functions would begin to act more as strategic partners.
The impact of covid, the war in Ukraine, and the ongoing financial crisis means that the role of the treasurer is more important than ever as many financial risks are being managed simultaneously. This further increases the need for AP and the treasury to work together to manage cash flow, develop a supplier payment strategy, collaborate on forecasting, and formulate strategic insights.
Accounts payable functions can also work with the treasury to examine cost-saving opportunities and streamline AP processes.
Prediction #7: AP Will Help Manage the Extended Workforce
Ardent Partners’ research found that 46.5% of the average company’s total workforce is considered ‘extended’ or ‘non-permanenet’. In 2022, it was predicted that AP could play a pivotal role in ensuring that payment data is leveraged in workforce planning, and that key gig workers are paid on-time.
The ‘great resignation’ has resulted in many full-time employees leaving their roles for new opportunities. Mass walkouts means organisations have turned to contract workers to fill gaps.
It’s critical for AP functions to have the right processes in place for managing temporary or freelance workers, particularly if they’re based in global locations. If contractors are not paid on time or correctly, it will make it harder to attract and retain workers in the future. Companies should be leveraging e-payment solutions to ensure that payments are made swiftly and accurately.
Prediction #8: Supply Chain Finance Utilisation Increases
The rise of cloud-based solutions tailored to the needs of suppliers, rather than buyers, was expected to make supply chain finance more accessible to all. This would result in increased adoption of supply chain financing (SCF) options in 2022.
With rising operational costs, comes reduced cash flow for many businesses. Employing SCF could help bridge the gap between cash flow shortages, while strengthening supplier relationships and building business resilience.
Prediction #9: AP Continues its Upward Trajectory
Accounts Payable was predicted to continue its modernisation including ongoing digitisation, AP automation, resiliency, and more opportunity to prove AP’s strategic value to stakeholders and business leaders.
Improved automation means that AP professionals can focus on their core responsibilities while machines do the manual tasks, in turn adding more value to the wider business. With a recession lingering, AP functions continue to be vital in ensuring people are paid correctly and on time, proving business value. By continuing digitising invoicing processes, businesses can cut costs and turn AP into a profit centre.