Businesses Embrace Automation in the Back Office

But question marks remain

Finance professionals play a multifaceted role these days—from strategy, forecasting, and risk management to analytics, cash flow, and cost control. In all these roles, they are looking for every advantage to make their businesses and teams more effective. One of the best tools they have to do this today is automation.

This sentiment came through loud and clear in MineralTree’s 9th Annual State of AP Report which included an independent survey of over 1,100 finance professionals (both buyers and vendors) in the U.S. about their priorities, challenges, and opportunities in the back office.

Four out of five of the financial professionals surveyed said that their finance organization requires more automation to be effective. They specifically cited the need to increase speed and efficiency in their back office processes. And they are doing more than talking about it:

More than half (51%) are using automation to reduce inefficiencies and costs caused by manual processes and reporting big benefits as a result.
17% are also using it to gain data and insights for better decision-making.
12% are applying automation to meet stakeholder demands and support business growth
11% are accommodating remote/hybrid workers and promoting better work/life balance with automation

Over the last three years, the percentage of buyer respondents in the State of AP survey answering “no automation; no plans to automate” dropped from 50% to 20%. While some businesses’ automation plans stalled in 2023 due to early recession concerns, they seem to be firmly back on track now.

AP automation is the biggest automation priority in the back office

While this progress and momentum are very encouraging, the survey also raised some questions about the finance team’s automation plans. When asked about their biggest automation priority in the back office, respondents cited accounts payable (AP) for the fourth year in a row. Accounts receivable (AR), expense management, forecasting, and payroll and benefits were also cited, but to a lesser extent.

AP inefficiency has been a challenge

While improved efficiency is the primary driver for more AP automation and the primary benefit realized most often by respondents, AP inefficiency has also been the biggest challenge for our respondents over the last 12 months.

This may be attributable to several factors:

Only one in five say they have completely automated their AP process. There is clearly more value to be gained by automating additional steps in the AP process or implementing end-to-end automation.
The challenges these organizations are having with inefficient processes may also be the driver for adopting and expanding their use of AP automation. For example, 39% cited inefficient invoice processes as a challenge, and one third said better invoice data capture and coding is a priority over the next 12 months.
Finance teams may be working with incomplete automation solutions that are not living up to their promise—and creating too many exceptions requiring manual intervention. When asked about how well their existing automation solutions met their needs, respondents were far from completely satisfied.
The hype around AI may also be raising expectations about what’s possible in automation.
However, the use of AI in accounts payable remains more talk than walk according to the respondents in our survey. Only 20% of the respondents currently use or plan to incorporate AI into their AP process in the next 12 months. And 31% are not yet sure of how they plan to use it.

Automation delivers huge benefits to finance professionals

Automation is delivering huge benefits to finance professionals across the back office, and AP in particular. But there are also significant opportunities for businesses to do more with it to make the finance function faster and more efficient. The State of AP Report delves into this and much more to help finance teams compare their own automation efforts and decide how to best move them forward to drive greater value.