Despite the digital direction that payments and finance have taken for five years and counting, a new study of UK business payments finds slow uptake of digital solutions in the accounts payable (AP) function, revealing troubling issues in the march to modernization.
Crunching numbers from AP respondents across 17 verticals, ‘The APA Benchmarking Report 2025’ from the UK-based Accounts Payable Association (APA) shows surprising gaps in modernization, challenging the UK's status as one of the world’s most financially cutting-edge economies.
Among the more unexpected findings is that a quarter of respondents say that less than 75% of their payments are made electronically. Though not the only jaw-dropper in this exhaustive report, that statistic is seriously at odds with the UK's digital payment infrastructure (and reputation).
"It's amazing that in 2025, a quarter of organizations are still using non-electronic payments when the UK has such advanced electronic payment capabilities," said Richard Ransom, Head of Corporate Solution Consulting at Bottomline, underscoring the point.
This persistence of traditional payment methods stems from historical practices and organizational resistance to change. Many businesses are hesitant to share banking details electronically due to security concerns, despite the availability of secure B2B systems.
The APA study also highlights a concerning trend in automation adoption. Only 1% of corporates report high levels of automation use in AP – that includes AI, robotic process automation (RPA), and blockchain – while 70% report little or no adoption.
Ransom explains this disconnect by pointing out that AP departments often struggle to secure budget for technological upgrades because they're viewed as cost centers, not revenue generators. Plus, many organizations have already automated their most straightforward processes and now lack the resources or strategic vision to go further.
And despite a widely held belief that artificial intelligence (AI) has the potential to transform AP, particularly for tasks like invoice reading and payment term analysis, current limitations in handling complex conversations and related instructions hamper broader adoption.
Agentic AI solutions could change that, but many corporates guard against investing in solutions that may not deliver immediate returns, and that executives may not feel they understand well enough. Still, there is a cost beyond dollars to lagging the market.
Payment Delays and Treasury Conflicts
Another disturbing APA finding is that 71% of AP professionals regularly experience payment delays, which points to systemic payment processing issues. Ransom identifies a fundamental conflict between AP and Treasury functions as a main cause of such delays.
AP teams typically focus on keeping invoices moving and maintaining good supplier relationships, while Treasury prioritizes cash optimization and liquidity management. "There's an inherent tension between AP and Treasury," Ransom said. "Treasury wants to hold onto cash as long as possible, while AP wants to process payments efficiently."
This friction often results in deliberately delayed payments, with Treasury departments extending Days Payable Outstanding (DPO) to optimize cash flow. The study shows that DPO has remained stable for most organizations, with only 6% reporting a decrease. With these departments often operating at cross purposes, the impasse aches for cooperation.
To get there, Ransom proposes creating a "payments champion" role within organizations; someone who can bridge AP and Treasury, aligning objectives and improving processes. “The problem is that everyone thinks someone else is doing it,” he notes.
Cost Visibility and Process Efficiency
Perhaps one of the most concerning findings from the APA study is that 40% of respondents do not know their cost per invoice. That this is considered an essential performance metric for AP departments makes this stat difficult to grasp.
Ransom attributes this lack of visibility to insufficient investment in measurement tools, and the complexity involved in calculating this metric accurately. "Without knowing your cost per invoice, how can you improve it," he says, stating a basic AP conundrum.
Companies should develop in-house skills and processes to measure their performance accurately and identify areas for enhancement. This could include investing in purchase-to-pay (P2P) automation, coupled with a proven bank-agnostic strategic payments partner, to create a more holistic approach to (and view of) all financial operations.
"Building a business case for investing in AP technology is essential," Ransom says.
He adds that "Organizations need to understand the potential return on investment, not just in terms of cost savings but also the improved supplier relationships, reduced fraud risk, and better cash management" that these investments deliver.
Supplier Vetting and Fraud Prevention
A section of ‘The APA Benchmarking Report 2025’ that Ransom finds particularly worrying relates to supplier vetting. Per the findings, roughly 20% of organizations have no formal supplier vetting process, exposing them to potential fraud and compliance smackdowns.
"I was shocked to find that one in five organizations don't formally vet their suppliers," Ransom says. This lack of due diligence not only increases the risk of fraud but also exposes organizations to potential sanctions violations and reputational harm.
Ransom shares a recent cautionary tale about an accountant who committed fraud by creating fake supplier accounts and diverting payments to themselves—a scheme that proper vetting procedures would have detected and prevented.
He emphasizes that strong supplier vetting is not just about fraud prevention; it also forms the foundation for efficient AP processes and successful payments automation initiatives.
"You can't automate effectively if you don't trust your supplier data," he says. "Proper vetting creates the clean data foundation that all automation depends on."
Organizations looking to improve their AP functions should start by establishing vigorous supplier vetting, clearly defining responsibilities for payment processes, and building a compelling business case for technology investments. By addressing these fundamental issues, corporates in markets worldwide can create more efficient, secure, and strategic AP operations that contribute positively to their overall financial health.