Ardent Partners recently completed its annual market research report focused on accounts payable entitled ePayables 2013: AP’s New Dawn. The report is based on survey data collected from 245 enterprises and we think you will enjoy it, even if you work in procurement or supply chain. One of the key themes of the report is the evolving role of AP – it is also the focus of today’s article [Sidebar: the full report includes detailed market research around the entire AP process (receive, process, and pay) interviews and anecdotes from AP leaders, and provides KPI’s that compare Best-in-Class AP operations with all others in the market].
For far too long, the AP function has been underutilized by the enterprise and considered to be a largely administrative function. However, Ardent Partners’ research has found that the view of AP is evolving from that of an administrator to that of a collaborator. Because of AP’s unique place within the enterprise, it is well-positioned to collaborate with and support other functions such as treasury and procurement. AP’s place is unique in that the function is one of the main gateways through which cash flows out of the enterprise; but, it is also a key part of the procure-to-pay (P2P) process which manages enterprise spend and relationships with suppliers. An AP function that is operating at high levels of efficiency is not only cost effective, but is also able to create the much needed visibility into invoice and payment data that is valuable to procurement and treasury departments.
From the procurement perspective, P2P has traditionally been about establishing and maintaining processes that reduce operational costs, deliver savings, drive compliance, and provide accurate data. Procurement is focused on driving more spend under management, negotiating and capturing the savings from the sourcing process, and managing supplier risk and performance (among other things). The second “P,” or what happens after the goods and services have been delivered, has generally been an after-thought for the average procurement team – viewed as a different process that is managed by a completely different team. This is not the case anymore; in fact, according to 61% of AP professionals, AP and procurement are currently working towards certain shared goals.
From the treasury perspective, an efficient AP department that can provide much-needed visibility into payables and access to accurate information on current financial liabilities or opportunities to capture early payment discounts is tremendously valuable in executing working capital optimization strategies. According to Ardent’s research, 45% of AP professionals agree that AP is instrumental in executing Treasury’s working capital optimization strategies. This is a perfect example of how AP can add significant value to treasury and to working capital management in general. Additionally, 51% agree that automating AP processes would significantly benefit the treasury group. An AP operation that constantly deals with high exception rates, numerous discrepancies and delays in invoice approval, erroneous payments and a general lack of visibility does a disservice to the treasury function and the enterprise at large.
Be sure to watch for ePayables 2013: AP’s New Dawn – it will soon be widely available.
Also, don’t forget to visit Payables Place: The Global Source for ePayables News, Research, & Analysis
