Editor’s Note: Ardent Partners recently published our annual AP-themed report, The State of ePayables 2017: The Convergence of Cash, Suppliers, and Intelligence. Today’s article is the final installment of a four-part series focused on how the role of the Accounts Payable professional has changed over the last 15 years. If you would like to get the full report, it is available for download here (registration required).
Historically viewed as a back-office function, executives have started to take a hard look at Accounts Payable (AP) operations and realized that it holds untapped cost savings and process efficiencies. As more enterprises identify the inefficiencies of the manual, paper-based AP process, many are looking into AP automation solutions as a way to streamline invoicing and payment approval workflows. Automated solutions not only help to speed up the process, but they also help reduce costs and provide more timely and accurate financial data and reporting that can be utilized. Increased levels of process automation along with more robust data and visibility into the overall AP process mean AP teams are now in a better position for success than ever before and are poised to transform into a more strategic department.
Beyond transactional efficiency, AP can serve as a centralized hub that provides insights and knowledge to help key decision-makers within the organization – namely the Chief Financial Officer (CFO) and other C-level executives. This new opportunity will help move the modern AP professional beyond the basics of their function. In fact the very future of the AP function hinges on its ability to transform itself into a more strategic unit, and serve as a convergence point within the organization.
Over the last few weeks we have discussed the three major areas that are directly linked to AP processes. These areas within the business are the most accessible and prominent ones that AP should pursue in order to reach this level within the organization. Here is a recap:
- Cash Management – AP departments can have a major impact on helping to improve the financial performance of the enterprise. The goals of Treasury and AP are not so different. By focusing on maximizing their strategic value while working to drive down costs, AP can provide the Treasury department with a big opportunity to help impact cash and financial performance.
- Supplier Management – Suppliers should be viewed as a source of knowledge and expertise that can be leveraged for a competitive advantage and mutual gain. If AP teams can build a stronger relationship with their suppliers, it will go a long way in having a larger impact on enterprise operations and overall performance. By leveraging data available to them (including supplier information, supplier performance, supplier quality, and supplier risk data), AP can deliver valuable business insights. Supplier data is a critical element to understanding the impact of these vendors on enterprise spend.
- Business Intelligence – There is untapped financial and business data warehoused within accounts payable. If AP teams are able to extract invoice and operational data, it can be utilized throughout the entire organization. Taking a data-driven approach is one of the best ways to accelerate P2P performance and drive more business value. This approach can be broadened via integrated and collaborative intelligence.
Strategy for Success
AP’s convergence will not be a process that will be completed overnight. While it is true that AP sits in an exciting position today, there is still a lot of work to be done. The three critical points of convergence (cash, suppliers, intelligence) must be supported in several key ways. Utilizing automation is a great way to spark process linkages. Applying data from AP and enterprise systems provides actionable intelligence that will be valuable for all collaborative partners. Lastly, AP leaders must get on the same page with all the other departments involved in the P2P process. Treasury, finance, and procurement must be able to see how AP can play a new role in this age of convergence. Planning and executing these plans will take time and regular communication, constant collaboration, and analytical prowess. If that is done, AP will put themselves in an excellent position to truly transform the role of the AP leader into a valued and strategic part of the organization.
Download the new report here, and learn more about how AP serves as the convergence point within the organization.