Nov 13, 2020

Accounts Payable Digital Transformation Accelerates Under COVID-19

Phil BeaneBy Phillip Beane

The coronavirus pandemic significantly disrupted work across all industries – especially where processes had yet to be automated or digitized. The same holds true in accounts payable departments. Those who leaned on short-term solutions, hoping the storm would quickly pass, now realize the importance of technology in enabling a smoother workflow for remote teams.

For example, consider accounts payable teams who received and processed paper invoices with onsite equipment, paid these invoices with onsite equipment that print checks and stamp envelopes. This process has been significantly disrupted with employees at their home. Accounts payable departments that implemented invoice and payment automation on a broad scale prior to the crisis found greater successes transitioning to remote work. Those who hadn’t are now following suit.

Security and Online Transactions

Accounts Payable Doing Electronic InvoicingElectronic invoicing and payments allow accounts payable teams to continue at a normal pace while working from home. However, the rush to implement e-payments also increased pressure on these departments to ensure payments are going to the right companies and not a fraudulent actor.

To illustrate, many suppliers have opted to transmit invoices electronically, which are then routed through an accounts payable workflow automation system and paid via Automated Clearing House (ACH). This has led to an increase in the work required to validate supplier bank accounts – especially if this process hasn’t been fully automated.

The traditional control to verify a supplier’s bank account was a call-back to a known contact in the supplier’s organization. However, the pandemic has disrupted call-backs because many supplier contacts are not on-site to answer office landlines. Email is unreliable because of the rise in phishing and business email compromise scams, where hackers take over a supplier’s email account and request a change to the bank account on file. In fact phishing scams are up 667% since February – warranting additional measures to protect supplier payments that are prime targets for bad actors.

Automating bank account change controls is the best way for accounts payable departments to validate bank accounts quickly and avoid fraud. To do this, authorized users should make any bank account changes via a secure portal – not over the phone or email – and the portal then validates that the company being paid is the same company that owns the bank account.

Digital Transformation Helps Prepare for Future Crises

COVID-19 is accelerating digital transformation and paving the way for more efficient and secure processes for a modern workforce. Even as some employees return to the office, the global health crisis could very well repeat itself, and we may find ourselves back in lockdown.

Transitioning to e-invoicing and electronic payments is critical now if you are not there yet. This needs to be accompanied with automated controls that validate bank accounts in real-time. Automation across accounts payable processes will not only create greater flexibility for remote teams, but also boost protection against payment fraud attempts in the long-term.

Phillip Beane is senior vice president of global field operations for APEX Analytix LLC. He can be reached at pbeane@apexanalytix.com.

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Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.