2022

The 7th Annual

State of AP Report
Key Trends, Business Priorities, and
Challenges for AP Teams and Their Vendors
Executive Summary
In 2022, companies are accelerating their digitization What to expect
efforts in an attempt to overcome ongoing operational
challenges caused by the COVID-19 pandemic, including This year’s report extracts key trends and patterns
disrupted supply chains, hybrid work environments, and across the AP landscape with dozens of insights and
the Great Resignation. Unfortunately, industry experts graphs, including comparisons with last year’s data.
expect these issues to persist for the foreseeable future, Aside from covering AP’s growing focus on automation,
further burdening AP teams that are struggling to keep our research identifies several obstacles impeding its
up with growing volumes of invoices and payments. adoption (page 7). In that vein, we also present insights
for optimizing operations through AP automation and
Despite these obstacles, business executives continue managed services to absorb volume growth, manage
putting pressure on financial leaders to pay vendors on suppliers, and support a hybrid work environment.
time to keep goods and services flowing. Historically,
businesses have addressed operational issues by Lastly, the report dives into the growth of electronic
adding headcount. However, this is not a viable option payments, starting on page 11, including their benefits
today given the shortage of solid candidates, rising and obstacles, as well as how they complement AP
wages, and prioritization of customer-facing hires. automation. Most notably, this section dives into the
For those that are able to fill their open roles, many ePayments blame game happening between buyers
still struggle to solve the inherent inefficiencies and and vendors, and why each party lists the other as the
unnecessary costs of manual AP processes. top obstacle to ePayment adoption despite mutually
beneficial and desired goals (page 13).
For these reasons, many finance leaders are embracing
digital tools to optimize their AP operations, streamline
payments, and solidify vendor relationships. In this
environment, it’s no surprise that The 2022 State of
AP, MineralTree’s seventh annual report, finds that AP
remains the #1 back-office digitization priority, and at a
higher level than last year.

New report features first-ever vendor

survey

With vendor relationships growing more important

than ever, we decided to expand this year’s report to
include a supplier survey. This marks the first time ever
that we have feedback from finance leaders as well
as their vendors to capture a 360-degree view of the
AP and B2B payments landscape, its most pressing
issues, and their impact across a range of industries.
By better understanding vendor priorities – topped
by their desire for fast payment – finance leaders can
make the necessary changes to strengthen these critical
relationships.

2022 State of AP Report - MineralTree 1

Contents

E X E C U T I V E S U M M A R Y. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

M A R K E T C O N T E X T. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A P AU TO M AT I O N . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

E L E C T R O N I C PA Y M E N T S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 1

L O O K I N G A H E A D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 6

M E T H O D O L O G Y & D E M O G R A P H I C S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 7

2022 State of AP Report - MineralTree 2

 MARKET CONTEXT

Pressure Mounts on AP
Amid Growing Obstacles
While the pandemic caused significant, ongoing challenges
across business operations, nowhere in the back office is its
impact felt more acutely than in Accounts Payable (AP). That’s because
of AP’s strategic role in paying vendors on time, and ensuring strong
relationships to ensure access to business-critical resources. This survey
shows that finance leaders realize the importance of AP, as well as the obstacles
it faces, in a year marked by volatile supply chains and staffing issues. Below, we
examine how these circumstances have catalyzed four key AP trends this year.

1. Vendor relationships are more

important than ever (hint: prompt
payment is the key to keeping
suppliers happy)

Due to supply chain issues, finance leaders are now

placing greater weight on vendor relationships than ever
before.

71%
Nearly 71% of finance leaders state that their
relationships with vendors grew in importance over
the past year, compared to 58.5% in 2021.

So how can buyers satisfy their vendors? When asked

what they value most from the payment experience,
vendors’ top response is the speed of payment (84.4%),
followed by payment accuracy (67.2%), and processing
cost (52.2%), among others. Yet, market and organiza-
tional challenges hinder AP’s ability to quickly process
and pay invoices, and ultimately fail to deliver on their
vendors’ wishes.

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 MARKET CONTEXT

2. Supply chain disruptions wreak havoc on AP processing and payments

According to finance leaders, AP’s top challenge caused by ongoing supply chain disruptions is invoice processing
issues and delays (44.1%), followed by payment delays and/or reconciliation issues (39.2%), and the pressure to reduce
operational costs (29.6%). Logistical breakdowns, such as delayed or partial deliveries, are a major cause of these
processing delays, which often lead to late payments.

3. Invoice and payment inquiries waste too much of AP’s and vendors’ time

Payment delays cause increased vendor inquiries, further slowing processing time. This can ultimately consume
the limited bandwidth of lean AP teams. Finance leaders noted that 43% of their teams spend 1-5 hours each month
responding to vendor inquiries, while 25.4% spend 6-10 hours. These interruptions cut into valuable time of the AP
team, adding yet another task to their list of responsibilities. They also drain team productivity, since it’s estimated to
take workers 23 minutes to regain focus following a workplace interruption. Multiply that by dozens of inquiries each
month, and it’s no wonder many AP teams either fall behind on answering vendor inquiries or find themselves strapped
for time to manage the rest of their workload.

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 MARKET CONTEXT

4. Hiring qualified AP staff is getting

more difficult

Historically, firms have used hiring as a solution to in-

crease the workload capacity for AP. Unfortunately, the
shortage of qualified candidates due to the Great Resig-
Unsurprisingly, vendors rank following up on payment nation has made this increasingly hard and expensive.
status as their biggest payment pain point. It is followed

54.3%
closely by reconciling payments/cash application, pro-
cessing payments and updating payment preferences/
details. Buyers and vendors alike seem to agree that
making or responding to vendor inquiries is an important
yet frustrating time suck.
More than half (54.3%) of the finance leaders
surveyed said they expect challenges or delays
in hiring quality AP staff this year.

Even without the challenges, throwing more people at

a fully or partially manual process doesn’t solve the effi-
ciency problems associated with time-consuming tasks,
such as: data entry, going into the office to retrieve pa-
per invoices and prepare checks, and physically routing
invoices for approvals and checks for signatures. It also
leads to more inaccuracies due to human error.

Unlike adding headcount, AP automation offers firms

sustainable, scalable growth by cutting down the man-
ual tasks associated with the AP workflow. The hiring
challenges referenced above are just one reason that
AP automation is growing more popular among today’s
firms.

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 A P AU TO M AT I O N

Companies are Digitizing AP to

Address Efficiency Challenges, But
There’s Room for Deeper Adoption
Thanks to digitization, companies can significantly shorten the invoice-
to-payment cycle, fulfilling the number one desire of vendors to get paid
quickly. It also reduces processing costs and errors, strengthens AP
security, and enhances visibility and cash flow management.

Full end-to-end AP automation gives finance leaders payments to keep essential goods and services flowing.
visibility – in one centralized view – into every invoice They also understand that paper-based, manual
and payment across their organization. Now, they can methods are no longer feasible in today’s complex and
view key data and insights to uncover bottlenecks, hybrid business environment.
optimize payment methods, and identify opportunities to
save money with volume discounts and early payments. Other top back-office digitization priorities this
year include Accounts Receivable (AR), expense
AP remains the #1 digitization priority management, close management, and forecasting.
While AP was also the top priority in 2021, it has grown
for the back office
in importance this year. Meanwhile, AR moved up a
position from the number three spot in 2021 to number
By selecting AP as their top automation priority, finance
two this year, probably due to the increased need
leaders recognize the strategic importance of timely

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 A P AU TO M AT I O N

for cash inflows given inflation concerns. Similarly,

expense management moved into the number three
position, likely due to these concerns as well as the re-
emergence of business travel.

AP automation is on a growth
trajectory

AP automation rates grew 61% from 2021 to 2022.

Nearly 52% of companies have automated AP in 2022,
compared to just over 32% last year.

resources and ERP integration challenges (20.2%), and

even budgetary restrictions (16.2%). It’s particularly
difficult for legacy, on-premise customers to overcome
this inertia and implement change because they have
not yet made the move to the cloud, and are reluctant to
ditch old methods and technologies even if they are no
longer working.

Most companies are partially

automated, missing critical end-to-end
value

AP automation covers a wide range of activities

AP mindset is the greatest barrier to
from streamlining just one step of the AP process to
automation digitizing the end-to-end invoice-to-pay cycle. Since
every step of automation provides additional value,
Despite AP automation’s impressive progress, one
the more automated an AP department is, the greater
key barrier stands in its path. Organizations continue
its competitive advantage. Companies investing in full,
to embrace traditional, overly-manual AP methods,
end-to-end AP digitization realize compounded benefits
believing that their current processes are working
– greater than the sum of its parts – by eliminating
(42.2%). This perception is by far the greatest barrier
friction and gaining synergies and insights across each
to AP automation, surpassing the lack of technical

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 A P AU TO M AT I O N

vendors need to be paid, and exactly how much. This

not only helps prevent obstacles like human error and
lost invoices from slowing down their payment process,
it also enables finance leaders to better manage
payments by avoiding late fees and strategizing the
most advantageous payment timelines.

16.2%
Only a small fraction of AP teams (16.2%) have
fully automated their AP process as of this year.

Most finance leaders are dipping their toes into AP

automation by partially automating processes; in fact,
only a small fraction of AP teams have fully automated
their AP process as of this year (16.2%). The good news
is that end-to-end automation has significantly increased
from last year, up from 9%, indicating that organizations
of the individual processes. These world-class AP teams are looking to close their AP automation gaps.
achieve significantly higher efficiencies, cost-savings,
and visibility across their invoice-to-pay process, while Of those in the earlier stages of their AP automation
reducing payment timelines. journey, most teams are focusing on automating their
invoice approval workflows (70.7%), followed by invoice
Teams with complete end-to-end AP automation have capture/coding (62.6%) and payment execution (57.6%).
unified visibility into all of their invoices and payments There is lower interest in Purchase Order (PO) Matching
– they can see what invoices are coming up, which (30.3%), likely due to the fewer organizations that use POs.

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 A P AU TO M AT I O N

Automation enables AP to do more By speeding up payments, automation can reduce

the number of vendor inquiries related to payment
with less
status, although questions related to bank information
or remittance issues can remain. As firms with AP
Of those who have automated their AP, nearly two-thirds
automation start to process more invoices with the
are now processing more invoices and payments with
same sized team, they must determine how to manage
the same sized team (61%), alleviating some of the hiring
a potential growing number of these inquiries that may
challenges previously discussed.
come with it.

Meanwhile other companies use their automation

efficiencies to reallocate freed-up staff time to other
projects (25.2%) which might include enhancing supplier
relationships and analyzing data to optimize operations
and payments. Meanwhile, a smaller number of
companies reduced their team size after automating AP,
and are now processing the same number of invoices
and payments with fewer resources (13.8%).

Many vendors noted that they are not pleased with the
service they receive from AP when it comes to inquiries.
Nearly half (44.4%) did not feel that AP responds to
payment-related inquiries in a prompt and satisfactory
manner. It is time-consuming and frustrating for vendors
to have to chase responses, and it can ultimately strain
critical vendor relationships. Self-service portals are one

44.4%
Vendor inquiries remain a point of
frustration for buyers and suppliers

According to finance leaders, payment status is the Nearly half (44.4%) of vendors did not feel that
leading reason for vendor inquiries (83.3%), followed AP responds to payment-related inquiries in a
by the need to update address/bank details (44.8%), prompt and satisfactory manner.
remittance questions (35.2%), and payment issues.

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 A P AU TO M AT I O N

way to alleviate these problems by enabling vendors to to view the status of invoices and payments, and keep
check on the status of their invoices and payments. In the processing momentum moving forward in a timely
addition, certain AP automation vendors like MineralTree manner.
also offer managed services, such as fielding incoming
payment inquiries from suppliers. These services enable
vendors to get prompt answers to their questions
without bogging down their customers’ AP teams.

Automation is key to supporting the

evolving hybrid work environment

The pandemic continues to leave a long-term impact

on the very nature of work. Work-from-home, once
considered a temporary situation for many AP teams,
appears to be here to stay. Work environments today
are not much different than a year ago, except that
remote workers have increased by about 2 percentage
points, and hybrid workers have increased by about 5
percentage points – all at the expense of those working
full-time in the office, which has decreased accordingly.

Interestingly, respondents’ projections from last year

of where we would be today underestimated the
number of remote workers by 16 percentage points, and
overestimated the number of employees working fully in
the office by about the same amount.

Both in 2021 and 2022, the largest number of workers

are hybrid, and that trend is expected to continue.
Finance leaders anticipate that nearly 55% of workers
will work a hybrid model by next year. Combined with
remote workers, more than 72% of AP staff will work (at
least, partly) remotely by 2023.

These work trends create

greater impetus for an
automated workflow.
With so many workers
at home, it’s no longer
feasible for companies
to pick up invoices in
the office, manually route
them for approval, or collect
signatures and authorizations for payment. No matter
where team members are located, they need to be able

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 E L E C T R O N I C PAY M E N T S

Electronic payments benefit all, but because of

the blame game, it’s not yet at a tipping point
When you consider that paper checks are a large contributor to the $510 billion
estimated annual costs that North American companies spend on manual
accounts payables (direct and indirect), it’s no wonder that ePayments
are growing in popularity among finance leaders. In contrast to checks,
ePayments provide AP with more cost-effective and secure payment
methods, along with increased visibility and control. But companies aren’t
the only ones to benefit from ePayments; vendors enjoy faster payment
with rich remittance data that enables easier reconciliation.

The most popular methods of electronic payments

include credit cards, virtual cards, and ACH and FX
(foreign exchange). Despite ePayments’ obvious
advantages, both buyers and vendors face certain
ePayment adoption obstacles. Yet, the need for speed
continues to drive interest.

ePayments are popular with buyers

and suppliers alike

Given the benefits of ePayments, it makes sense that

both buyers and suppliers want more payments to be
made electronically. The number of AP teams that plan mail checks, organizations can save up to 80 percent of
to shift more of their spend to ePayments increased processing costs.
from 64.6% in 2021 to 70.8% in 2022. Vendors are
wholeheartedly on board with this digital payment Payment fraud has become a major concern for
strategy – more than 80% of them prefer getting paid organizations, and checks are the leading source of
electronically. risk – accounting for 66% of companies impacted by
fraud, according to the 2022 AFP® Payments Fraud and
ePayments pay dividends for all Control Report. This is by far the riskiest payment type,
parties distantly followed by companies using ACH (37%), wire
(32%), and corporate/commercial credit cards (26%). By
The top reasons finance leaders are making more contrast, a mere 3% of companies experienced fraud
ePayments are time savings (77.2%), more timely with virtual cards. These cards provide the strongest
payments (63.1%), cost savings (56.5%) and increased protection because they issue randomized account
security and fraud protection (48.9%). The time and cost numbers that are authorized for a specified amount for
savings are substantial. By eliminating the cost of paper one-time use only.
and postage, as well as staff time to print, sign, stuff, and

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 E L E C T R O N I C PAY M E N T S

On the receiving end, vendors also realize key ePayment adoption is growing
advantages by accepting ePayments. The top benefit
vendors cited for electronic payment this year is timely ePayment adoption continues to grow as more finance
payments (85%). This is likely because supply chain leaders realize its value. In fact, every form of electronic
disruptions have severely impacted their cash flow, payment method saw increased usage in 2022 while
yet they need a steady infusion of income to produce manual checks decreased 10 percentage points from
goods, fulfill customer orders, and keep their business the previous year.
running smoothly. Following slightly behind, vendors
favor ePayments for its processing efficiency (79.4%). Virtual cards show the most significant adoption over
Other reasons include improved remittance (43.9%), cost the past year, from 9.3% of companies increasing
savings (39.4%), increased security and fraud protection usage of these cards in 2021, to 37.5% this year. This
(38.3%), and customer satisfaction (35%). rapid growth is likely due to the rebates that teams can

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 E L E C T R O N I C PAY M E N T S

earn with virtual cards. Companies use these rebates ePayments types as the top reason impeding its growth.
to provide fast ROI, paying for the cost of their AP Conversely, 62.8% of vendors identified the primary
solutions, or, in some cases, even transforming AP from obstacle to ePayment as being customers not ready to
a cost center to a profit center. move away from checks.

After virtual cards, ACH saw the next largest ePayment Other top ePayment concerns from AP center around
gains (from 50.1% in 2021 to 66.6% in 2022). FX was their perception of the time and effort it takes to set
third on the list, moving from 7.2% in 2021 to 19% this up, including team capacity to contact/enroll vendors
year, likely due to the need to source new overseas (40.4%). The irony is that finance leaders can easily
vendors to compensate for supply chain disruptions. eliminate this anticipated work by partnering with an
AP automation provider that offers managed services.
The Blame Game is blocking progress These services relieve AP from all the time-consuming
administrative tasks involved in executing payments,
While both buyers and vendors favor ePayments, they onboarding vendors, responding to inquiries, and
continue to name each other as the biggest obstacle resolving any payment issues. They not only allow AP to
to furthering ePayment adoption. This year, 56.5% of work more efficiently and focus on finance priorities, but
finance leaders cited vendor unwillingness to accept they also strengthen supplier relationships.

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 E L E C T R O N I C PAY M E N T S

Finance leaders were also concerned about having to AP automation accelerates ePayments,
implement separate processes for additional payment
but some obstacles remain
types (27.5%). However, if they use the right AP
automation solution, no additional processes or extra
The depth of AP automation directly correlates to the
work is required.
value companies receive. The greater the degree of
automation, the greater the efficiencies, cost-savings,
From the vendor perspective, processing fees is the
visibility, control, and other benefits that finance leaders
second most common vendor obstacle for ePayments
realize. For example, MineralTree customers report
(48.3%). However, it’s important to note that vendors’
faster ePayment growth on average. By digitizing their
need for timely payments, ranked at 85%, (See page 4)
payments, these firms are saving more money while
greatly outweigh any concern about associated costs.

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 E L E C T R O N I C PAY M E N T S

increasing their security and visibility. While automation savings by optimizing the payment mix and encouraging
effectively addresses processing inefficiencies, costs, virtual card adoption to increase rebates.
and other issues, AP still must contend with time-
consuming, vendor-related tasks involving ePayments. Managed services providers assume the responsibility
for securely managing all ePayments information and
Automation + managed services = a processes – removing the burden from AP. Additionally,
winning solution managed services providers handle all vendor inquiries,
so the AP team doesn’t have to – removing a major
By turning to an AP automation provider that offers time sink from operations. This gives AP more time to
managed services, AP teams can reduce their work and focus on core functions and identify strategic payment
enjoy fast, easy ePayments processing. As an extension opportunities. At the same time, because managed
of the AP team, these automation vendors can offer services providers are laser-focused on vendor services,
continuous vendor enrollment, so finance leaders not they can respond promptly to inquiries, helping to
only capture more ePayment spend today, but can increase vendor satisfaction and improve relationships.
continue to benefit as more vendors sign on in the
future. The provider can also help the team maximize

Managed Payment Services, an Extension of Your Team

Continuous Vendor Maximize Savings Enhance Vendor

Enrollment & Rebates Relationships

Performs continuous Optimizes your payment Fields payment inquiries

virtual card and ACH mix to maximize savings, from vendors. providing
enrollment security, and rebates prompt service

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 LOOKING AHEAD

Where do you go from here?

In 2022, AP teams face an ever-growing list of burdens: supply chain
disruptions, work-from-home and hiring challenges, and often, an
increasing volume of invoices and vendor inquiries. The good news
is that automation and managed services can play a huge role in
addressing these issues. Insights from the report uncover several
ways AP teams can increase operational excellence to overcome
barriers and gain maximum benefits, including:

Improve vendor satisfaction with faster and managing vendors are among the obstacles
standing in the way of progress. Companies can offload
payments
these tasks by implementing managed services.

Keeping vendors happy is more essential than ever,

and their top priority is fast payment. Yet, market and Adopt managed services to overcome
organizational challenges are making it difficult for AP to lingering ePayment obstacles, and
process and pay invoices quickly. This is something that take vendor relationships to the next
automation can easily fix. level

Automate AP for competitive Vendor inquiries create disruptions and more work for
advantage. Multiply your value overtaxed AP teams, often resulting in a slow response
through end-to-end digitization to vendor inquiries. While automation helps to reduce
the interruptions, managed services ensure all inquiries
Finance leaders are prioritizing automation to handle are handled in a timely manner, and take vendor service
current and future invoice volumes within their staffing to the next level. By handling all the details of vendor
constraints and across hybrid work environments. Begin relations in ePayments, managed services enable AP
the journey to start realizing efficiencies, savings, and to benefit from continuous vendor enrollment, greater
other benefits, or if partially automated, gain synergies savings and rebates, increased security, and improved
and significantly increase your value through end-to-end vendor relations from quicker, effective service.
digitization across invoice to pay. You will gain visibility
to maximize spend and cash management, as well as AP automation, combined with managed services,
greater efficiencies, accuracy, and protection against is a no-brainer for AP teams trying to do more with
fraud. less, and stay afloat amid supply chain volatility. It
handles common AP headaches for overtaxed, often
understaffed AP teams while elevating productivity,
Increase ePayments for mutual benefit
visibility, control, savings – and even earnings.

ePayments give AP teams greater control over their

End-to-end AP automation is a strategic investment with
spend, while also saving time and money. At the same
immediate and long-term returns; it enables teams to
time, your vendors can boost their cash flow thanks
absorb a higher volume of invoices, effectively manage
to more timely payments, as well as gain process
growth, and operate more strategically.
efficiencies. Yet, the time-consuming tasks of contacting

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Methodology &
Demographics
For the seventh consecutive year, MineralTree surveyed
a wide range of finance professionals involved in AP to
analyze their current state of operations, challenges, and
outlook for the future. For the first year ever, our State
of AP report also includes responses from suppliers and
vendors.

The 2022 State of AP Survey focuses on the long-

term impact of the pandemic on finance, the progress
organizations have made with digital payments and end-
to-end AP automation, and their digitization priorities.
This report, which is a snapshot of where the industry
is at a specific point of time, can serve as a benchmark,
providing the opportunity to compare your practices and
digitization plans to the survey group.

In preparing the report, we surveyed 912 finance

professionals involved in the AP function, along with 180
employees at supplier organizations between February
and April 2022. The respondents represented a mix of
industries, company sizes, and job levels. The annual
revenue of these organizations ranged from under
$1 million to more than $1 billion, with fewer at either
end of the spectrum and the majority at the $10 -$100
million level. The number of supplier payments for these
companies ranged from 1 to more than 2,000 per month,
with the majority in the 101-250 range. The job level of
respondents varied, with the greatest number holding
manager positions, followed by individual contributors,
executives, then directors.

Survey responses were collected anonymously online

via SurveyMonkey.

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