Staying abreast of the latest trends in accounting can feel like a full-time job for any seasoned professional. That’s why it’s always important to revisit new ways to implement industry-proven advice and strategic best practices into your company’s financial strategies on a regular basis. As the technologies surrounding the sophisticated world of AP continue to evolve, so should your knowledge of the most current trends affecting your industry.
For both for-profits and nonprofits alike, there are several exciting accounting trends to watch in 2022. It’s important to note that while technology is always advancing, due to the high level of importance associated with a business’s banking needs, it does take time for the financial world to implement new approaches, sans hiccups. However, in the wake of the global COVID-19 pandemic and the associated rise in remote work environments, many of these trends have been expedited and will be making an impact sooner than experts previously anticipated.
In this post, we’ll examine four trends that have staying power in the AP world and evaluate their impact on your business: virtual AP payments, the growing prevalence of cashback on AP spending, decreased cost as a result of AP automation, and the benefits of streamlined reporting due to improved analytics and technology.
- Virtual AP Payments
As AP processes continue to evolve in correlation to the technological platforms available to us, be on the lookout for increased opportunities to process AP through new virtual mediums. Specifically, there will be an uptick in the number of professionals looking to make payments through ACH, bank-based bill pay, wires, and virtual cards.
For company profiles ranging from hungry startups to seasoned businesses, keep in mind that there are no major differences in the AP process, so these applications will be readily available for widespread use across industries. That being said, there may be some fluctuations between which industries will gravitate towards certain payment methods.
While these accounting trends are not “new” per se, as they have been emerging for a long time, their application and general usefulness will be adopted as the new norm for AP departments. It will be interesting to chart the trajectory of more traditional methods, such as paper checks and wire transfers, that may become antiquated in today’s technologically savvy business environment. While this is still somewhat debated within the industry, it is important to think about which methods will win long-term, as these are all different processes that essentially serve the same function. One salient point is clear, one of them will emerge as the dominant forerunner and become accepted as the most popular choice at some point in the near future.
- Cash Back Transactions on AP Spending
AP spending accounts for a large percentage of most businesses’ spending each month. Therefore, it only makes sense that emergent forward-thinking companies would search for ways to maximize their ROI in this expense area. It is becoming increasingly common to get cashback on transactions that occur on AP software for spend management, which is an enticing feature for many companies looking to make the most of their budgets. Software programs like Airbase go as far as to have individual spend cards which make it easy to earn points on their cash-based reward system.
It’s pretty clear to understand the benefits of earning revenue back on necessary expenditures. Having a percentage of your AP spend come back to you in the form of cashback–even if it’s a small percentage–is a huge win for AP departments. This is also a fantastic way to reduce their overall operating costs by choosing payment options that allow them to get a return on that spend. The prevalence of these types of incentives will help to drive many AP departments towards certain software that can offer these types of reward programs.
- As AP Automation Improves, AP Costs Will Decrease
One of the benefits of the enhanced automation possible today for AP integration is that there has recently been a reduction in the overall costs associated with AP. Thanks to advancements in AP automation, there is less of a need to spend money and time on things like tracking down envelopes, paying for postage, and tedious manual entries of numbers. This labor is time-intensive and requires personnel to carry out. However, with time-saving technology, these tasks can be quickly automated, and they provide better mitigation against the risk of human error.
These time-saving improvements can help teams to expend their energy on more efficient uses of their time. This is especially relevant as companies around the globe make strides to incorporate and adopt enhanced remote work environments, streamlining AP processing and cutting costs is a major consideration facing departments. AP automation provides a holistic solution to these evolving needs.
- Deeper Insights into Data Provide Streamlined Reporting
As AP integration refines existing strategies for processing payroll, it also makes it easier to understand and interpret data. One of the major benefits of having all of your numbers consolidated into one system, is that it allows you the flexibility to access deeper insights that help your data analytics make more of an impact.
One of the biggest advantages is that reporting becomes a lot clearer. When you make payments that are processed through your AP system, instead of your bank account, there is an added level of transparency that makes it easier to reconcile later. Understanding key numbers such as vendor spend, spending by categories, and volume of disbursements by payment method, and (if you’re using Point #2 of this article) the percentage of cashback earned on spending.
Stay Informed -VaroTeam Can Help
While changes are always occurring in the financial sector, prudent financial logic relies on actually implementing changes that work in tandem with your business’s goals. Take time to research the right fit for your industry, and stay up-to-speed on the latest software that fits your needs. Whether you are a small business or require an enterprise solution, look for these trends to become more apparent in 2022, as you navigate the changing financial tides in the wake of the global pandemic. VaroTeam can help your business keep current on accounting trends. Schedule your free consultation today!