Growing payments volume is one sign of a healthy business, provided businesses can suitably service increasing mass-payout needs without crimping growth with legacy methods.
Being an accounts payable (AP) laggard is known to have negative impacts downstream, and with so many FinTech options available, there’s little patience for payables frictions that yield to the right solution.
For the study High-Volume Accounts Payable: Achieving Long-Term Growth Through Automation, a PYMNTS and Routable collaboration, over 200 executives from small- to mid-market companies in four industries — transportation, logistics and shipping; online marketplaces; the gig economy; and virtual events — were surveyed to see why AP automation assists with growth, and how companies of different sizes in various verticals are using it, or plan to.
In just the past year, mass-payout companies have seen demand spiking in the sectors we studied, as digital transformation catalyzes more commerce even under an inflationary shadow.
We found that 95% of surveyed firms saw their average monthly payables increase, while 97% of firms say plans to increase sales and earnings would be impeded if they were unable to handle higher AP volumes. “The companies with the most pronounced concerns about their ability to process payables sufficiently are also more likely to be upgrading or planning to upgrade their payments platforms,” the study states.
Among takeaways of this research is the fact that AP volumes are expected to increase sharply in the next few years, meaning it will become more unmanageable unless upgrades occur.
That growth is coming. Per the study, 93% of surveyed companies “expect monthly payables to increase in the next three years,” with 55% expecting volume increases up to 30% running through their AP systems, “and 20% of firms expect to experience a 31% to 50% increase.”
Seeing growth outpacing capacity as AP volumes increase, surveyed companies were overwhelmingly in favor of system upgrades and modernization to handle it.
“The larger the number of payouts a firm manages, the more likely it is that the firm will recognize the necessity of increasing its capacity to manage its payables volume,” the study states, noting that 67% of firms processing a minimum of 2,500 payables monthly say automated systems are “very” or “extremely” important to increasing the number of payables.
Get the study: High-Volume Accounts Payable: Achieving Long-Term Growth Through Automation
