While it’s not clear when exactly life will return to “normal”, we do expect that a lot of the practices that were created or gained steam in 2020 will continue into 2021. That’s, in part, because many of these trends were caused by the shift to remote workplaces and distributed workforces.
And it’s not just companies like Google, Facebook, or Twitter that have employees working away from the office. AP teams, as well as many AR workers, are also working remotely. In many cases it seems, they’ll continue to do so.
How does this impact accounts payable? We’ve found five ways in particular:
1) Mailing and Emailing Invoices Is Out – Guaranteed Electronic Delivery Is In.
Suppliers will continue using the most surefire ways to get their invoices delivered to customers in 2021. They can’t afford invoices that get lost in the mail or buried at the bottom of long email chains. Nor languish on AP team members’ desks, necessitating a phone call to check in on status. They want to submit invoices digitally and receive a sign or prompt saying their invoice was delivered. In fact, in a Nexus survey, suppliers said they plan to step up their usage of electronic portals to get just this type of invoice delivery confirmation.
2) Electronic Payments Will Dominate – Paper Checks Will Decline.
Similar to the first trend, suppliers have learned that going digital for payments is good because it often translates into faster payment. Achieving guaranteed payment with virtual cards is even better and something that paper checks can’t touch.
In a recent survey of Nexus suppliers, 66 percent said they were likely to accept virtual card or ACH from MORE of their customers in 2021. After all, they can look into their payments in real-time, and even process them, all from their own homes.
3) Faster Payments Are Worth the Fee.
Even suppliers who’ve traditionally not been able to accept virtual card – or one-time use credit cards sent electronically – will look for solutions that allow them to do so. This is because cards have shown themselves to be so valuable for preserving cashflow. Even once the pandemic is over, suppliers will look to always safeguard their cash position since it has shown itself to be such a “make or break” factor.
4) Visibility and Transparency Must Be Accessible at One’s Fingertips – and On Demand.
Visibility into budgets, spend, invoice/payment statuses, processing bottlenecks, and all other AP benchmarks will remain more important than ever. With employees distributed and working on the modified schedules they’ve become accustomed to while they WFH, it’ll be necessary to access all performance data online 24-7.
5) Centralized Procurement Will Increase.
Sending employees out to buy supplies with their credit cards has always been a risky proposition. No finance teams wants to deal with last-minute, surprise expenditures at the end of the month. Then, 2020 added an additional layer of complexity: the possibility of an employee catching Covid-19, while on the clock and shopping for work supplies.
Many real estate companies addressed these threats by adding online supplier catalogs directly to their AP platforms, so they could easily shop (using pre-negotiated rates), create purchase orders, and get them approved all in the same place, without ever stepping foot in a store. We expect this trend to continue, especially considering the benefits of electronic catalogs and POs extend far beyond the safety component.
While there’s no post-pandemic crystal ball that shows just how everything pans out, these electronic behaviors that have picked up speed are sure to produce tangible benefits for both buyers and their suppliers well into 2021. Learn more about these Covid-induced shifts in the purchase-through-payment process in Nexus’s 2020 supplier surveys and observations report.