With sweeping new tariffs going into effect this week, middle market companies across industries are feeling the shockwaves. As import duties rise on everything from raw materials to finished goods, finance teams are facing a perfect storm: shrinking margins, volatile supply chains, and recession fears that refuse to fade.
The coming months may bring volatility, but they also present a powerful opportunity for finance leaders to build greater resiliency in their operations.
Read on to learn how your finance team can help navigate the current economic uncertainty with solutions designed to help increase visibility, enhance control, and drive efficiency throughout your purchase-to-pay process.
The Current Economic Landscape
The U.S. economy is grappling with a complex and rapidly evolving set of pressures. The latest round of U.S. tariffs includes a baseline 10% on all imports, with some reaching up to 125%.
These measures have sent financial markets into a tailspin, with the Dow Jones Industrial Average and S&P 500 experiencing sharp corrections. Goldman Sachs increased the probability of a U.S. recession to 45%, while JPMorgan Chase pegs the risk even higher at 60%. Recent tariffs also extend to key trading partners Canada and Mexico, with new duties on energy and auto-related imports now in effect.
These developments come at a time when inflation remains elevated, supply chains are still reeling from years of disruption, and business confidence is waning. For finance teams, the implications are clear: greater cost volatility, unpredictable cash flows, and heightened scrutiny from internal and external stakeholders.
For accounts payable (AP) professionals already juggling tight deadlines and high transaction volumes, it’s a storm that demands smarter tools and sharper insights.
Although there will be a 90-day pause on some of the tariffs going into effect, let’s break down the key implications of tariffs on AP teams—and how AI-enhanced software can help them navigate the economic uncertainty.
Gain Visibility and Improve Supplier Relationships Despite Tariff Complexity
Finance and AP teams are asked to track, report, and forecast in an environment where supplier costs are changing daily. Tariff-related expenses are often inconsistently labeled, hidden in invoice line items, or simply unaccounted for.
This makes it difficult to determine whether cost increases are driven by tariffs, inflation, or supplier price hikes. Without visibility into true spending patterns, organizations struggle to respond strategically—whether that means holding suppliers accountable, adapting pricing models, or having informed conversations to maintain mutually beneficial partnerships.
When visibility is lacking, supplier relationships can be negatively impacted. Misunderstandings over pricing or payment delays can erode trust. However, offering flexible payment options and delivering timely payments in the method suppliers prefer helps reinforce trust and loyalty.
Decentralized payment models also heighten the risk of double payments, inconsistent terms, hidden surcharges, and make organizations more susceptible to fraud. Implementing a centralized, automated review process can help catch these issues.
Automation Advantage:
To help solve for these challenges, AP automation software can provide:
- Near real-time dashboards and analytics that give finance teams the clarity they need.
- AI-powered line-item capture technology that scans invoices, automatically captures line items and gives you granular visibility into price changes.
- Even when tariff charges are not indicated on an invoice, AvidXchange’s AI approval agent uses historical invoice and supplier data to help highlight increased or inconsistent pricing. It can flag the invoice as having a lower likelihood of being approved, allowing AP professionals to strategically review further or have a discussion with the supplier about the changes.
- Tools that support supplier relationship management by enabling timely payments, preferred payment methods, and consistent communication—building trust and improving supplier satisfaction.
These features give organizations clear insights into the true drivers of cost increases, transforming AP data into strategic insights to help quantify the impact of tariffs.
Future-Proof Your Supply Chain
AP teams benefit from flexibility to navigate ongoing supply chain disruptions. This includes the ability to maintain timely payments to suppliers, quickly onboard new suppliers, map tariff exposure across the supply chain, and identify opportunities for early payment discounts.
In addition, tariffs can eat into margins and increase uncertainty in payment planning, impacting cash flow. AP teams need tools to help them forecast and manage cash flow under these fluctuating conditions.
Automation Advantage:
To solve for these challenges, AP automation software can provide:
- Intelligent workflow routing to help prioritize payments, avoid late fees, and strengthen supplier relationships.
- Near real-time payment tracking for visibility into payables and payment schedules.
- Automated invoice capture.
Turn Compliance Into a Competitive Advantage
Tariffs introduce not only costs but also compliance complexity. As tariff scrutiny intensifies, it’s a good idea for businesses to document duty payments and be prepared to justify budget variances. Manual systems make audit prep a time-consuming burden.
To help with this, some AP automation tools offer the ability to:
- Document expenses and historical information for tax and audit purposes.
- Generate reports for stakeholders, lenders, and regulators.
- Track cost variations across departments and timeframes.
With a digital audit trail and robust reporting features, AvidXchange helps ensure payments—tariff-related or not—are tracked, searchable, and verifiable.
Recession-Ready Efficiency Through Smart Automation
Tariffs inherently make invoices more complex, which can create confusion and slow down manual review and reconciliation. This lack of standardization also increases the risk of errors and delays.
When economic conditions tighten, operational efficiency isn’t just important—it’s essential. Investments in technology like AI-enhanced AP automation software can help AP teams do more with less, especially when margins are tight.
Automation Advantage:
AvidXchange’s AP automation software uses intelligent data capture and AI-driven line-item recognition to streamline invoice processing, help detect potential tariff-related price increases, and can enable accurate coding and approvals through custom workflows.
A survey of our customers found the following:
- 92% say that our AP automation solutions save them time.
- 90% say they have improved productivity.
- 83% say our solutions enable employees to engage in more value-add work.
These savings aren’t just cost reductions. They’re resources that can be reinvested to allow teams to focus on value-add work, such as forecasting, supplier negotiations, and business growth strategy.
Elevate Forecasting and Financial Strategy
Today’s AP teams are no longer just processors—they’re strategic partners. Leadership expects data-backed insights into supplier pricing behavior and cost trends. In an era when economic conditions shift rapidly, financial planning needs to be more dynamic than ever.
AP automation software can help AP teams pivot from reactive to proactive with access to actionable insights and trend analysis. The ability to harness this data elevates the AP team and positions them as strategic partners in smarter decision-making across the business.
Automation Advantage:
AvidXchange offers robust data and analytics to help finance professionals:
- Identify suppliers potentially passing along tariff costs versus absorbing them through pricing increases, inconsistencies, or line-item surcharges.
- Prioritize supplier conversations or negotiations.
- Forecast inflation- or tariff-driven expense increases based on historical trends.
- Reallocate budgets in real time based on actual spending data.
AI-enhanced AP automation software can give finance teams the tools they need to plan with confidence.
Purpose-built Solutions for Industry Challenges
Tariffs don’t impact all industries equally. And they bring more than just added costs—they introduce layers of complexity that strain workflows, complicate supplier relationships, and challenge financial forecasting.
That’s why our purpose-built solutions are designed for the industries we serve:
- Construction: Track material surcharges and manage vendor changes.
- Real Estate: Analyze cost increases on maintenance and renovations.
- Healthcare: Document medical supply impacts and find alternative vendors.
- Government & Nonprofits: Justify budget shifts and demonstrate fiscal responsibility.
AvidXchange: The AP Automation Platform Built for Economic Uncertainty
As tariff uncertainty evolves, the need for clarity, control, and strategic agility only grows. And middle market finance teams know that what worked yesterday won’t cut it tomorrow. That’s why AP automation is no longer a nice-to-have, it’s a critical enabler of resilience.
Middle market companies are turning to AvidXchange—not just to automate AP, but to gain the strategic intelligence they need to thrive.
Our AI-enhanced software backed by experts helps finance teams to adapt in real time, capturing the data you need to plan smarter, move faster, and lead with confidence. With deep integration into ERP systems, mobile capabilities, and configurable workflows, AvidXchange is built for the way finance teams work today.
Finance teams with AP automation solutions aren’t just surviving today’s economic challenges—they’re transforming them into opportunities. Because when finance teams have access to the right data at the right time, they become more than stewards of cost. They become architects of strategy.
Does your finance team have the strategic vision needed to remain resilient as we move through this period of economic uncertainty? Book a demo with one of our AP automation experts to learn more about AvidXchange.
