A few years ago, adoption rates for Accounts Payable (AP) automation platforms was in its very early stages. Although some companies had been using some form of AP automation, it was not very widely adopted. Or the solutions in place didn’t offer the complete automation package that more modern solutions provide. In the next few years, we expect AP automation to grow dramatically in the world of property management.
Why is it the future?
You only have to look at the paper proxy, the paper status certificate, the paper parking payment, the paying for guest suites in the party room by cash or check, the paper AGM notices, et cetera, et cetera. It's pretty obvious that given all of the resident-facing automation and paperless trends in property management, that AP will follow equally in the same direction.
Why hasn't AP Automation fully happened yet?
Well, AP is slightly more difficult than some of those other problems listed above, because there's a larger surface area. There are multiple stakeholders, there’s a compliance dimension with payments regulations, there are multi-part interactions and also integrations with existing accounting systems.
Our internal theory though is that teams are too busy spending time on their current AP processes that they just can’t find time to look for something better! :)
What has driven management companies to adopt AP automation so far?
Adoption has been primarily reactive to date. Main drivers include:
1. Client demands - current or prospective clients may speak up if they see an inefficient process or they may know that a better way exists
2. COVID - the pandemic has brought to the forefront a lot of the challenges in the fragility of manual or paper-based AP processes
3. Growth - it's pretty difficult today to find enough qualified license managers and find enough property accountants. Really, the last thing you want to be doing when you're in growth mode as a management company is try to figure out how are we going to attract and retain enough talent to deal with our mountain of AP paperwork?
4. Re-organizations - for example, the impact of mergers and acquisitions, switching to/from outsourced accounting or team changes such as an employee taking parental leave