2017 Predictions and Trends According to AP Thought Leader, Henry Ijams

by Adam Frazier 0

For the past 15 years, Henry Ijams has been helping companies ina consultative role to improve their Accounts Payable processes. We recentlyinterviewed Henry to get his take on what’s going to happen in the AP world in2017. You can find that video interview here.

Q: What do you foresee as the biggest trend in AP for 2017?

A: What I’m most intrigued with in2017 is how ubiquitous Accounts Payable automation is starting to become. It’s very similar to how online banking has become so common with how we dobusiness today, and how we now use mobile devices to accomplish so many tasks.If you think back, even a few years ago, it would have been very difficult toimagine getting real-time social feeds and checking your email directly fromyour phone. It’s really the same thing that we see with the nextgeneration of accounts payable automation. Bill payment no longer has to bepaper-based. Companies can now utilize a third-party to scan invoices, andapprove them on their mobile device or desktop. Companies no longer have tostruggle to find out where the invoice is, if it’s been approved, and ifthey’ve made the payment. All of these questions can now be answered in onesimple, combined system.

For that reason, I think that it’s a very exciting time to be inaccounts payable automation. All the tools are in place, all thetechnology is there, and service providers are combining the automationelements with third-party services. No longer do Accounts Payable Managers, Controllers,and CFOs need be worried about the paper-based processes inside of theirbusinesses.

Q: What will be the biggest disruptors in AP in 2017?

A: The most important disruptionthat I see in Accounts Payable is that it’s no longer about invoice or billautomation, but instead about invoice and payment automation combined.Companies no longer just want to eliminate the paper in their Accounts Payableprocess, they want a combined AP and Payment Automation system. Why? Becausethat’s the way companies think about Accounts Payable. They think about thepeople who pay the bills. Companies want to automate the manual processes thatcome along with paper, like the check signing and reconciliation. However, theyalso want suppliers to be able to take advantage of electronic payments.

How are we going to get there? In 2017, there are more tools andtechnology to accomplish just this, and we’re finding that suppliers are muchmore comfortable with being paid electronically today than they ever have been.It’s no longer foreign to ask them, “Do you want to get your payment via avirtual card or an ACH?” They’re more used to that conversation, and they’reready to do it because they see the benefits of getting paid faster and moresecurely. Most organizations are still struck around 20-25 percent electronicpayments. Today, the best-in-class companies can now easily achieve 50 percentor more electronic payments utilizing the right combination of tools andtechnology to take them there.

Q: What are some of the challenges in AP that need to beaddressed in 2017? What are the opportunities?

A: I think that there are really three big questionscompanies should ask in 2017 to uncover the opportunities that they have. Thefirst question is, “Are you using the time that you have most effectively?”This one is the most important for companies, because it has to do with wherethey’re spending most of their dollars. Time is so precious in organizationstoday, and especially as the economy is growing, this question must beanswered. If your company is still having employees work on lots of paper-basedprocesses, then it means that they’re doing jobs that aren’t very efficient oreffective for your bottom line. So, what are you going to do to free up theirtime so they can do more value-added activities in your organization?

The second big question is, “What are you doing to improve yourmargins?” With the economy growing, you have two opportunities: one is toincrease your revenue by capturing new sources of customers, and the second isimprove your margins. What are you going to do to lower your costs and use yourteam more effectively?

The third question is, “What is your company doing to addresspayment fraud?” This is an emerging problem, and one that we’ll see more of in2017. As more processes move electronically the fraudsters – in all kinds offlavors and forms – are trying to figure out how to game our systems.Increasingly, we know that paper checks are susceptible to fraud. Banks aretrying to protect against this, but the fraudsters have too much money,especially in B2B, where the check values are larger. The larger the checkvalue the more attractive they are for fraudsters. I recommend fororganizations to think about using third-parties, like banks and others, whocan help control the process using their existing control infrastructure.

Q: Forbes has reported that the majorityof finance will be automated in 2017. What do you think about this prediction?

A: Forbes’ prediction is likely based on very largeorganizations – enterprise-size companies – but for the medium and smallerorganizations, it means that they can take advantage of some offerings and getthere faster because there are less people involved in the process of buyingand implementing. There’s still a huge opportunity for medium and smallorganizations, because PayStream Advisors just conducted a survey and publisheda report this year that shows that 46% of payments are still going out by papercheck. While the number continues to decline year over year, it’s still goingto be a while before it will be safe to say that the majority of finance in themid-market is automated.

Q: What are some signs you should look for in 2017 to know thatit’s time for your company to automate?

A: I think it starts out withidentifying if there are things your company wants to accomplish, but can’tbecause you don’t have enough staff. So, the first question to ask is are yougoing to be growing in 2017? If you are, then do you want to grow with theexisting business processes that you have in place today? Or, do you want tobite the bullet and improve it? Very often by improving processes byimplementing technology, employees are much more efficient and hiringadditional headcount becomes unnecessary to accomplish business goals.

The second thing you should think about is the dynamic of yourworkforce. Do you have remote workers, remote field offices, franchiseoperations, or multiple facilities? These scenarios can lead to confusion ifyou still have paper-based processes, because paper invoices can come in to onelocation, need to be paid out of another location, and all of this has to bedone through the mail. It’s very difficult to gain visibility into and controlover payables in this type of process. Organizations structured this way aregreat candidates for moving forward with automation.

The last question you should think about is what to ask yourselfis what are my employees used to? Think about the way we do business today.Everything has an online component, and even more it typically has a mobilecomponent. Are you giving your employees the tools to do their jobs the mostefficient and effective way possible? That means giving it to them in ways theycan consume anywhere, anyhow, anytime. Think about how you might be doing yourexpense management process. Perhaps you want to move electronically with that.Start with accounts payable, then you can move to expense management. Or, maybeyou’ve already done expense management – don’t you want to move away fromspreadsheets? Don’t you want to move away from signatures on checks andinvoices? This is the opportunity that organizations have in 2017.

Q: As big data becomes even more important, how will that impactaccounts payable?

A: Well, it’s pretty simple. If we think about our accountingsystems and all the powerful data that’s inside our general ledger—the questionwe need ask ourselves is how are we using that data? What we’re seeing is anopportunity to improve your interactions with your suppliers. You have a lot ofinformation about them, and they want to do business electronically with you,but what are you doing about it?

Companies, like AvidXchange, see value in this same set of data,but have the power to do something with it. How is that, they leverage the datafrom the 300,000 suppliers in their network that they manage on behalf of theircustomers. This ecosystem of data helps suppliers get paid faster, customersnegotiate early payment discounts with time freed up from manual tasks, andhelps reduce fraud by delivering payments in a variety of electronic methods.In other words, the tide is shifting away from just thinking how you’re goingget your bills paid, but rather how you’re going to use data to pay them mostefficiently.

How do you see Charlotte’s tech sector growing in 2017?

Many people think of Charlotte as a financial services town.While that’s been our legacy, what we see emerging is a fast-growing, vibranttechnology sector. We’re seeing a lot of start-ups come here, a lot ofinternational businesses moving here. I think this can be attributed to ourairport, access to services, and, most importantly, our access to a continuallygrowing talent pool. The Queen City’s exciting culture is attracting a lot ofreally great companies and people to work in those businesses.

Interested in AP Automation? Schedule an AvidXchange Demo Today!

AvidXchange™ revolutionizes the waycompanies pay their bills. Serving more than 6,000 clients throughoutNorth America, AvidXchange is an industry leader in automating invoice and paymentprocesses for midmarketcompanies spanning multiple industries including Real Estate, FinancialServices, Energy, and Construction.

Our full-service payment offerings are available usingAvidPay, AvidXchange’s bill payment service. When you select payments inAvidPay to be paid, they are then sent over to the AvidPay Network. The AvidPayNetwork is the network through which your vendors get paid. The AvidPay Networkoptimizes the electronic payment mix, with an average electronic adoption of45%.