In a rapidly evolving economic landscape marked by conflicting indicators from inflation, employment, and growth, CFOs are unclear if they should expect a recession or an expansion. They are seeking strategies to maintain business stability in all economic scenarios.

Traditionally viewed as a necessary but unassuming cog in the company machine, AP has emerged as a potent tool for creating economic resilience.

Stampli, a leader in Accounts Payable (AP) automation software, emphasizes that the AP function, when leveraged innovatively, can create value beyond the finance department to influence business-wide stability.

“Accounts Payable can be more than just an administrative necessity,” said Eyal Feldman, CEO and Co-founder of Stampli. “AP’s critical role in managing cash flow, maintaining vendor relationships, and regulating workforce needs can have a profound effect on a company’s ability to weather economic fluctuations. By automating the AP process, businesses gain a unique opportunity to exercise greater control over these factors and smooth out cyclical pressures.”

A Case Study: Avid Acceptance’s Approach to AP
As an illustration of this innovative approach, Stampli highlights the success story of its customer, Avid Acceptance. The Salt Lake City-based auto finance company, managing a loan portfolio of over $230 million with 14,000 active accounts, has experienced impressive growth of 30-40% year over year.

Auto financing is an industry that is highly sensitive to macroeconomic conditions. Curtis Ash, Avid Acceptance’s CFO, has been instrumental in reimagining the role of AP in the company’s business, leveraging AP automation software to control cash flow, maintain clear visibility into vendor performance, and ensure workforce agility. This pioneering approach has equipped Avid Acceptance with a robust toolset to thrive amidst economic uncertainties.

Ash employs a three-pronged strategy to navigate economic cycles:

1. Cash Flow Control: AP automation software provides real-time visibility into invoice processing, which Avid Acceptance strategically manages to optimize cash flow. Ash says, “We don’t want to play games with our vendors, but we also don’t want to pay bills until they’re due. We use analytics to understand when invoices are received and coded, and we carefully control when payments should be sent out.”
2. Vendor Performance Management: “You have to watch how your partners manage their cash flow, too. In tough times, cash crunches lead some vendors to cut corners or not do all the work that they’re supposed to do,” Ash explains. But with manual accounts payable processes, managers in the field often lack easy visibility into vendor obligations because the invoices, which detail those obligations, are not easily accessible: they are files in someone’s inbox or paper on someone’s desk, and it takes time to get them.”With the more archaic AP process, typically a manager would have to email their accounting partners, which slows everyone down.” AP automation software gives field managers instant access to invoices and vendor documents, providing them with the necessary information to validate their vendors’ performance against their obligations. With information this easy to access, managers help the business maintain high standards of accountability and ensure value for every dollar spent.
3. Workforce Agility: AP automation software dramatically multiplies the capacity of the AP workforce, allowing Avid Acceptance to scale in either direction without over- or under-hiring. In slower business periods, Avid Acceptance can redirect AP staff to manage loan payments or assist in portfolio management tasks that become more crucial during a downturn. “We can shift our focus between driving new business and servicing our existing portfolio without the need to adjust headcount. This lets us maintain consistent staffing levels throughout the extremes of economic cycles,” Ash said.

This innovative AP strategy has proven to be a driver of resilience and prosperity for Avid Acceptance, demonstrating AP’s potential beyond administrative necessity. “Accounting always has to adapt and change, but the changes are not as compounded if you’re operating efficiently under all circumstances,” Ash said.

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