Slow AP Workflows Threaten Supply Chains at a Critical Moment

Watch more: Need to Know: Finexio, Ernest Rolfson

Since its inception, the accounts payable (AP) function has been a sleepy back-office chore.

It represented the type of financial plumbing that chief financial officers rarely mentioned on earnings calls. But not anymore.

A new wave of AP modernization, blending managed services with artificial intelligence automation, is recasting invoice processing as a lever for cash protection, supplier trust and incremental revenue.

“AP is really one of the few levers that companies can use to protect cash and reduce risk,” Finexio CEO Ernest Rolfson told PYMNTS, adding that this shift is reshaping how finance chiefs think about liquidity when resilience and growth increasingly hinge on smarter, faster payments.

AP modernization is not merely about process efficiency, he said.

Faster, more predictable payments can strengthen supplier ties at a time when production bottlenecks or shipping delays can threaten revenue. Embedded controls against invoice fraud, which are a growing risk in an era of sophisticated phishing and synthetic-identity scams, can help protect cash that otherwise would leak out the door. Better visibility into payables can sharpen cash flow forecasting and inform decision-making.

“Doing manual work that can be done by a robot is the No. 1 thing today in this area,” Rolfson said. “That’s how you unlock capacity and set yourself up for the next steps.”

Adoption of AP automation is uneven. Large multinationals and companies with complex global supply chains have moved fastest, lured by scale economics and acute exposure to operational risk. Mid-sized firms often lag, daunted by the cultural and technical shift.

“Change is hard,” Rolfson said. “There’s friction around suppliers, and there’s a lot of concern around risk of change. That slows things down.”

“Manual AP survives because the execution of it is messy and fragmented,” he added, citing research from PYMNTS Intelligence and Finexio that found 68% of companies still handle invoices manually, even though managed AP services can cut task time by as much as 84%.

CFOs aiming to unlock the growth potential in AP need to recognize that the challenge of modernization is as much behavioral as technical. It involves persuading internal teams and external suppliers that the new system is not just more efficient but more secure, more resilient, and ultimately more profitable for everyone involved.

The cost of clinging to outdated AP workflows is not merely administrative but increasingly relational and strategic.

“When your payment is late or there’s a problem or the check gets lost, that supplier may or may not be able to make payroll depending on what they’re doing,” Rolfson said. “Businesses don’t want that. That’s just a massive exception and phone calls into the staff that no one really needs.”

Transformation of any back-office function raises a pragmatic question: Where to start?

Modernization isn’t purely about software. For many companies, especially mid-market and enterprise firms with complex supplier bases, a fully managed service layer is the difference between aspiration and execution.

Rolfson said his answer is to tackle manual labor first.

“Modernization works best when you take out the biggest bottleneck, and the biggest bottleneck is the labor today,” he said. “It’s the manual entry, the fragmented workflows, the many unnecessary inbound phone calls. That frees capacity immediately.”

Only after the labor burden is reduced does it make sense to focus on eliminating payment delays—“Get off the checks,” as Rolfson put it—and on driving up digital adoption through AI-powered supplier engagement.

Managed services are the bridge that lets CFOs move through these phases without overloading internal teams, he said. One of the biggest levers out there for CFOs is the shift from paper checks to digital and card-based payments.

“If you can get your suppliers paid with a card, you’re eliminating the cost of a paper check, about $8, and you’re getting on average $8 of cash back by that payment as well,” Rolfson said. “Suppliers, particularly large national ones, don’t want checks. Processing them, including the ones lost or stolen, costs them more than the cost of accepting card payments.”

Still, moving to digital AP is not simply about replacing paper with pixels. The biggest gains come when automation is paired with AI-driven analytics. AI’s predictive power helps AP teams not just optimize payment flows but also reduce exposure to fraud, an urgent issue as criminals exploit fragmented email- and phone-based processes.

The PYMNTS Intelligence and Finexio report found that AI-powered targeting can achieve 90% accuracy in predicting supplier adoption of digital payment methods.

“Being able to confidently predict which suppliers will adopt which payment methods, particularly where certain methods have higher risk of fraud, is critical,” Rolfson said. “You can have higher conversion rates to electronic payments that both save money and make money. It reduces wasted effort, speeds up enablement, and drives suppliers that can and want to take electronic payment to do that.”

In over a decade of processing corporate payments, Finexio has found that about 2% of all transactions still require human intervention, often for benign but unavoidable exceptions, Rolfson said.

Using AI for prediction and routing and humans for the rare edge cases is proving especially powerful as companies scale. It turns AP from a bottleneck into a platform that grows with the business.

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