COVID-19 Highlights Need for Automation in Accounts Payable Departments

How have accounts payable departments been disrupted during the coronavirus pandemic?

Accounts payable departments that had yet to automate processes before the crisis are facing significant disruption. For example, in accounts payable, simple tasks like receiving, processing and approving paper invoices require onsite teams. Furthermore, printing and, in the case of accounts receivable, receiving paper check payments depend on a person sitting in a well-established company location, rather than a person’s home residence. However, those AP and AR departments that had implemented automation on a broad scale prior to the crisis have experienced a smoother transition to remote work models.

What technology has become critical for helping AP professionals maintain a smooth workflow?

Electronic payments and e-invoicing allow AP and AR processes to continue at a normal pace while teams are geographically distributed. Many suppliers have opted to transmit invoices electronically, which are then routed through an AP workflow automation system and paid via ACH.

Automated supplier onboarding and risk assessments are also essential for procure-to-pay (P2P), as this technology allows businesses to quickly onboard suppliers without compromising fraud and compliance controls and to quickly deploy COVID-19-specific business continuity questionnaires, collaborating with suppliers in real time, with full transparency.

How has the rush to online payments increased pressure on AP departments?

While there are many benefits of using electronic payment methods during the coronavirus, we’re also observing an increase in the work required to validate supplier bank accounts—especially for those who haven’t fully automated this process.

Until recently, the most relied-upon control for bank account changes was a call-back to a known contact in the supplier’s organization. However, COVID-19 has disrupted call-backs as no one is answering office landlines. Instead, those land lines are being forwarded to home and cell phones, which are notorious sources of fraud. Email is also unreliable because of the rise in phishing and business email compromise (BEC), where hackers take over the supplier’s email account. Fraudsters are in a great position to pose as suppliers who have been paid by check, and to request a change in payment method to a bank account.

Automated bank account change controls represent the best way for AP departments to validate bank accounts quickly and avoid fraud. These controls include the following:

● Limit bank account change requests to authorized users on secure portals.

● Include security controls, like multi-factor authentication that isn’t reliant on cell phones.

● Track when changes are made from new IP addresses and devices, and raise alerts when those locations or the banks associated with the bank account change are overseas.

● Most importantly, engage deep, integrated, real-time verification with the recipient banks to ensure the owner of the bank account is, indeed, the supplier.

How do automated controls help relieve this pressure? What are the benefits of implementing automation on a broad scale?

This significantly deeper and more automated level of control prevents fraud in normal circumstances and provides better control even in times of global business disruption.

With automated controls, AP departments gain tighter control than normal call-backs to known contacts and aren’t reliant on AP or vendor maintenance data stewards whose own ability to execute the calls may be disrupted.

The real-time aspect of these controls enables faster supplier on-boarding when new suppliers of critical resources or replacements for long-standing suppliers are needed in a hurry.

Moving forward, how can companies ensure their AP departments are ready for the next crisis?

The current crisis could very well repeat itself in the coming year, so companies need to take immediate action to help AP departments reduce future risk and increase preparedness.

Transitioning to e-invoicing and electronic payments is critical, but this needs to be accompanied with automated controls that validate supplier identity in real-time. Automation across AP processes creates greater flexibility for teams working remote, boosts protection against fraud attempts, and allows for same-day supplier onboarding without compromising controls.

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As senior vice president of market and product strategy at apexanalytix, Danny Thompson is responsible for defining, communicating and leading our company’s software product strategy and roadmap. He works closely with our customers to ensure that each solution helps them meet their business objectives.