Accounts Payable (AP) departments have always played a crucial but often underappreciated role in keeping organizations financially healthy. In steady economic times, AP teams manage vendor relationships, pay bills, and prevent cash leaks from careless errors. But when economic conditions become unpredictable, as they have recently, AP becomes the unsung hero that can make or break a company’s cash flow resilience.
Today, AP teams face two forces at once: known cost increases, like rising sales taxes, and unknown economic variables, like tariffs, and supply chain disruptions. These threats can squeeze working capital from both sides. Meanwhile, leadership expects AP to be more strategic than ever, not just a back-office cost center but an early-warning system and a partner in protecting the company’s financial stability.
How can AP teams prepare for this new normal, and how to use automation and AI to stay ahead of the curve?
Some changes you can plan for. If your state announces a sales tax increase, you can adjust budgets, update processes, and negotiate vendor contracts accordingly. But tariffs, inflation spikes, or sudden supplier cost hikes are a different beast. They hit with little warning and often at the worst possible time.
Here’s what happens when these unknowns collide with a weak AP process:
To weather this, AP needs to be proactive, flexible, and data-informed. Modern tools and a few strategic mindset shifts can help.
One of the fastest ways to protect working capital is to extend payment terms strategically. But this isn’t about unilaterally telling vendors you’ll pay later, that will backfire fast.
Locking yourself into rigid long-term supplier agreements can be dangerous when tariffs or material costs fluctuate overnight.
When every dollar counts, you can’t afford to hemorrhage cash through preventable errors. The classic AP mistakes, duplicate payments, paying for goods never received, or missing discounts, become more painful.
AP often gets stuck with the “bad cop” role, the team that delays payments and chases discounts. But in volatile times, your suppliers are partners in your financial survival.
Here’s the honest truth: you can’t manage volatility with a spreadsheet-heavy AP process. The more unpredictable things get, the more you need your team focused on exceptions and strategic work, not keying in invoices or stuffing checks.
Where can AI and automation make a difference?
You don’t need a multi-million dollar overhaul to get started. Many existing ERP or AP solutions have built-in automation features that go unused because teams believe they don’t have time to implement them. Start small: pick one or two pain points and automate those first.
Another shift for AP teams is collaborating closely with your CFO, Treasury, and Procurement colleagues. In a volatile economy, information moves fast, and AP sits on critical data.
By regularly sharing insights, like shifts in vendors or signs a key supplier is struggling, AP becomes an early-warning system for the whole organization. That’s a huge value-add when leadership is scenario planning for worst-case situations like sudden tariff spikes.
Some AP teams go on autopilot in uncertain times. That’s the surest way to get blindsided. Don’t assume:
Accounts Payable is the last line of defense against cash flow problems that can snowball in uncertain times. By taking a proactive approach, tightening payment terms smartly, building flexible supplier relationships, fixing process leaks, and using AI and automation to work smarter, AP teams can transform themselves from reactive processors into strategic protectors of the company’s financial resilience.
You don’t have to predict every economic curveball. But you can be ready to absorb the hit when one comes your way. And when your leadership team realizes that AP is the radar keeping an eye out for rough weather, they’ll know exactly who to thank.
Pick one process to improve, one vendor term to review, and one automation tool to test. That’s how you get resilient, one smart move at a time.