Accounts Payable: From Back-Office Cost to Revenue Generator
The Accounts Payable (AP) landscape is evolving rapidly, with digital transformation at its helm. Once seen as a mere cost center, AP is now emerging as a revenue generator, reshaping the way businesses handle B2B payments. Bill Fox, Chief Commercial Officer at Finexio, was recently interviewed by PYMNTS.com to discuss this transformation. "We're talking about AP. We're talking about checks. We're talking about fraud, "Fox begins, setting the stage for a profound discussion on the future of commercial payments.
The Enduring Predicament of Checks in B2B Payments
In an age where digital transactions are ubiquitous, the continued prevalence of checks in the U.S. B2B payments sector is both a curiosity and a stubborn hurdle. Fox finds it "a bit of a mystery," considering that in regions like Europe, checks have been phased out for years. "When you talk to a European CFO or CEO, they're like, 'I haven't seen a check in 15 years,'" Fox remarks, highlighting the stark contrast with the U.S. market's slower transition. The challenge lies not just in technological adoption but also in cultural and regulatory inertia that keeps checks in circulation.
Accounts Payable's Metamorphosis
AP's metamorphosis into a revenue-generating function is central to its modernization. The adoption of electronic payments, especially virtual cards (V cards), offers a dual benefit. "V card is one of the few areas where you can both greatly reduce your vulnerabilities and at the same time create potential revenue," Fox explains. This transformation is not just about cost savings; it's about turning a traditional expense into a strategic financial asset.
Dispelling the Myths: The Simplicity of AP Automation
Many businesses hesitate to automate AP due to perceived complexities and expenses. Fox challenges this notion, asserting that the process is more straightforward than many assume and that education is key to dispelling these myths1. Automation, Fox suggests, enhances vendor relationships by offering more payment and technology choices, and it's not the resource drain that some fear. Instead, it's an opportunity to improve efficiency and security while introducing new revenue streams.
The Intersection of Technology, Regulation, and AP Efficiency
In our tech-driven era, AI and real-time data flow are becoming increasingly influential in AP processes. Fox, with a background in AI, understands its significance, noting that "education within the organization" is crucial as fraud schemes become more sophisticated. Companies need to embrace these technologies not only to improve their own processes but also to stay aligned with evolving regulations and industry standards.
Incremental Adoption: The Journey Toward Automation
Fox advocates for a phased approach to AP automation, beginning with the payment process itself. By targeting this first, businesses can immediately reduce their exposure to fraud and gradually expand their automation efforts. This step-by-step journey allows organizations to adapt without disruption, ensuring a seamless transition to more advanced AP functions.
Bolstering Security: The Role of AI in Fraud Prevention
As AI advances, its role in both perpetrating and preventing fraud becomes more significant. "The AI will improve both the bad actors' inroads and obviously, cybersecurity companies are going to be using it to constantly increase defenses," says Fox. Organizations must adopt a proactive stance, integrating advanced security measures and fostering a culture of awareness to mitigate risks effectively.
The Broader Impact: AP in the Realm of PaaS
The future of AP is intertwined with the broader adoption of Payments as a Service (PaaS). This paradigm shift towards integrated payment solutions is set to redefine the financial operations of businesses. Fox's insights into this trend underscore the need for ongoing vigilance against fraud and the continuous adoption of innovative technologies.
Embracing the Future: AP's Strategic Advantage
As we conclude, the message from Bill Fox is clear: Embracing AP automation is imperative for building a secure, efficient, and financially savvy enterprise. By transforming AP from a cost center to a revenue driver, businesses can unlock significant value and competitive advantage. The insights from industry experts like Fox serve as a roadmap for navigating the complexities of B2B payments, fraud prevention, and digital transformation.
To learn more about Finexio, click here to reach out to one of our payments experts and discover how your business could be leveraging the benefits of AP Payments as a Service.