Accounts payable operations have been on the verge of digitalizing payments, but could COVID-19 be the straw that broke the camel’s back? At the beginning of the COVID-19 pandemic, organizations dealing in accounts payable operations were split between digital and physical payments. Those who had virtualized portions of their payment process noticed a mild disruption in flow, while those who were solely dependent on physical checks have endured significant strain finding ways to pay their suppliers.
During Monday’s virtual town hall meeting hosted by IOFM, six panelists from the finance industry sat down to discuss what they’ve seen across the industry and ways to approach the current challenges in AP operations.
Here are strategies to do more with less during the pandemic, and after.
The outbreak of COVID-19 caused a shockwave across most industries- the financial industry being no different. The most noted challenges for payment organizations have been supplier onboarding and check payments. 27% of Monday’s town hall participants reported that they have had to extend the time frame of making payments to their suppliers due to cashflow considerations.
Tipalti CMO Rob Israch says: “[COVID-19 and social distancing] could be the straw that broke the camel’s back when it comes to checks.”
Physical checks were already on their way out, but now it is almost essential to make the leap. Virtualized AP operations are seeing increased demand no more than ever. Though none of us saw this coming, the biggest challenge and solution is to be prepared should it happen again.
Socially, COVID-19 has impacted us all. During this time AP communications has been key. Checking in on employees and ensuring efficiency while everyone is working from home go hand in hand. Comdata’s SVP, Meitra Aycock noted that now has been the most important time to show your employees that you care. While productivity from home has been less of an issue, having employees come in weekly to cut checks has not been ideal.
The majority of the industry working from home and increased security measures have been a large part of the impact. Taking extra encryption precautions and maintaining security has been implemented across the board and could potentially strengthen morale moving forward.
COVID-19 has taught us that being prepared is our greatest advantage. Those who have already virtualized payments are seeing increased business and organizations can now see unprecedented benefits when they begin offering virtual payments to their suppliers. Especially when many other companies cannot. That’s a real advantage when competing for supplies in our current market.
Transcard EVP of Sales Bob Sneed pointed out there is the potential for peak in business for those who are prepared in terms of payments. Though this was unexpected on a global level, it could very well happen again. Getting into the digital realm of payments is beneficial to AP operations not just while were in the midst of a pandemic. Moving forward, virtual methods will ensure that measures are in place to avoid payment disruptions.
Suppliers want options. Offering a variety of methods allows prospects to choose what’s right for their business. Many businesses who declined virtual methods and cards are reconsidering and in need of those options. Touching on what may not have been in the supplier’s interest a few months ago could result in a completely different outcome.
Communicate with your suppliers. With the global impact occurring, keeping partners and suppliers in the loop when payments will be delayed is crucial. Though it’s not ideal, in today’s state it is fully understood.
If you’re interested in transitioning into digital payment methods to better prepare and enhance your organization, Transcard is here to help.