Manual accounts payable (AP) operations can cost firms more than they might think.
And the complexity of enterprise AP programs presents a challenge for businesses, particularly as many companies face growing transaction volumes without a corresponding ability to expand staff.
“It’s a serious problem within these AP departments. Completely inefficient manual processes compounded by fragmented systems,” Ernest Rolfson, CEO and founder at Finexio, told PYMNTS.
Rolfson explained that traditional AP operations often involve “swivel chair” activities, with staff manually entering information across disparate platforms, handling paper invoices and issuing physical checks. This fragmented system increases the risk of errors and slows down payment processes while also preventing AP teams from contributing strategically to the business.
At the same time, manually managing sensitive information such as bank accounts or supplier changes exposes companies to fraud — something that Rolfson highlighted as a major concern for CFOs.
“If I’m manually handling payment information … it’s risk, long story short,” he said, noting that as businesses grow and transaction volumes increase, the risk becomes more pronounced, especially when staffing levels remain static or are limited.
That’s why firms are ditching the paper and cashing in on the savings and efficiencies AP automation can bring, transforming how companies operate and driving strategic value beyond cost savings.
Read more: Automating Accounts Payable for Cost Savings
According to Rolfson — and he is far from alone in saying so — AP automation is essential for reducing manual effort, minimizing delays and lowering the likelihood of costly errors.
But the current state of AP in most enterprises is disjointed and relentlessly redundant, with companies often juggling multiple systems across different regions or departments. This lack of integration leads to inconsistent data, duplicating efforts and increased risks.
“Many large organizations have unconsolidated, disparately run AP locations or departments,” Rolfson said, adding that firms often rely on three to five disconnected systems to manage their accounts payable, which results in a missed opportunity to centralize and streamline AP operations for greater control and visibility.
As a result, AP teams are asked to do more with fewer resources, balancing manual, operational tasks with more strategic responsibilities — a shift that AP automation platforms are designed to enable by removing time-consuming, repetitive tasks. If you don’t have this in place, “you really can’t scale without adding more bodies,” Rolfson said.
AP automation platforms aim to centralize payments, invoicing and security under a single system. This approach offers a streamlined view of all cash flow activities, making it easier for businesses to track payments in real time while also providing a single source of truth for data-driven decisions. By automating payment execution, exception handling and fraud prevention, companies can reduce the workload for their AP teams, often cutting down the time spent on these tasks by up to 84%, Rolfson said.
When companies assess how well their AP systems might be doing, the entrenched fragmentation of the space can make it difficult to measure the return on investment (ROI) for their AP processes, as it is nearly impossible to gauge performance across such disparate systems. This is ironic, because one of the greatest benefits of AP automation is the ability to demonstrate clear ROI through consolidated operations and real-time reporting.
As AP automation evolves, artificial intelligence (AI) and machine learning are playing a critical role in optimizing processes.
Rolfson pointed out that AI can provide both real-time and predictive analytics, improving speed and efficiency while helping companies make smarter decisions about payments and supplier management.
One area where Finexio has seen success with AI is supplier management. Rolfson highlighted that the Finexio platform uses AI to predict the most efficient payment method for each supplier, eliminating much of the guesswork that bogs down AP teams and transforming payment operations from a manual process to a data-driven one.
By leveraging AI to analyze payment data and trends, automated AP innovations can help businesses transition from costly manual methods like checks to more efficient electronic payments, ultimately turning AP into a revenue-generating department rather than a cost center. This capability is particularly important for companies managing thousands of suppliers, many of whom may change their payment preferences annually — a challenge that AI can effectively address by anticipating and responding to these shifts in real time.
As businesses transition to digital platforms, it becomes essential to track and analyze every aspect of their financial operations. Rolfson said that one of the industry’s biggest shortcomings is the lack of analytics and benchmarking tools to help companies assess their performance — a gap that Finexio is addressing with its customer value dashboard.
“You can’t manage or improve anything that you can’t measure,” he said, underscoring the importance of data-driven decision-making in AP processes and how Finexio’s platform enables real-time visibility into every transaction.
“Some of the biggest problems we run into is that companies don’t even know who they’re paying. They don’t have a great record of their vendors; they don’t have a great vendor master; they don’t have tax IDs; they have almost no knowledge,” Rolfson added.
Finexio stands out, he said, by offering a customer value dashboard that tracks every transaction and supplier interaction, assigning a monetary value to each task. This level of granular insight is invaluable for companies looking to optimize their operations.
“We know, hey, you had 200 vendors change their banking information. We know what that’s worth to you,” Rolfson said, underscoring the platform’s ability to translate efficiencies into tangible savings.
In addition to cost savings, automated systems also help prevent fraud by removing human intervention from sensitive tasks. Advanced fraud detection tools, such as real-time transaction monitoring and counterparty validation, are essential in protecting companies from sophisticated threats. The combination of AI-driven analytics and enhanced security measures enables businesses to scale their operations while maintaining a high level of trust in their payment processes by continuously monitoring for anomalies and validating payment changes in real time.
Moreover, digital platforms allow for real-time visibility into cash flow, enabling CFOs and AP teams to make more informed decisions about supplier relationships and payment methods, turning AP departments into strategic enablers for the business.
Looking ahead, Rolfson said that Finexio is making its business-to-business (B2B) payment platform even more accessible via continued investment in the API infrastructure layer.
“We’re making that the infrastructure, the data, the underlying software, more available via API and via integration to let others bring components of this out into the market,” he said.
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