A few years ago the mere mention of data mining and data scientists in the same sentence as Accounts Payable (“AP”) would probably have gotten you puzzled and even concerned looks from your colleagues and counterparts in other areas of the business. But today, the concepts and ideas are not as far-fetched as they once seemed. Businesses are slowly starting to realize that AP is sitting on a ‘goldmine’ of data that is just begging to be mined. Carly Fiorina, former CEO of Hewlett Packard, once said “The goal is to turn data into information, and information into insight.” Best-in-Class and forward-thinking organizations long ago realized this, and have been taking advantage of the data at their disposal and turning the data into intelligence, and ultimately power that comes from knowledge. The data in AP represents a deep well of untapped financial and business information that can be extracted and converted into intelligence.
The first step to gaining access to this data is to automate your AP department. When the AP department has been automated you are now able to provide insight into cash flow planning, outstanding liabilities, aging reports, payment terms transformation, days payables outstanding (DPO), detecting and preventing fraud, etc. Organizations that take a data driven approach to AP put themselves in a better position to manage their cash flow, accelerate P2P performance, and ultimately drive more value to an organizations bottom line.
Ardent Partners’ recently released ‘State of ePayables 2019’ research report highlighted just how valuable and critical data and intelligence are to their Accounts Payable and finance team. In this years’ survey, 55% of respondents said data and intelligence was important and frequently used. Even more encouraging was that a full third (33%) said their reliance on data/intelligence was critical to drive projects, improve performance, and achieve goals.
Organizations that view AP as a strategic asset put themselves in a better position to be successful and do a better job managing the lifeline of every organization, cash. Those that view AP as just a transactional hub that only needs to be automated to improve operational efficiency, are selling themselves short and missing out on the real power, knowledge, and insights that AP can provide.
The concept of employing a ‘data scientist’ in AP may seem like an alien concept to many but, if you take a step back and think about it from an objective perspective, the idea really isn’t as far-fetched as it seems. A data scientist is someone who knows how to extract meaning from and interpret data. As we’ve discussed many times in the past, AP is sitting on a vast amount of spend data including buying patterns, preferences, purchase timings, costs, discounts, volumes, taxes, etc, etc, etc. Mining the data the data that AP has access to will reap benefits for your organization. Data analysis doesn’t require a data scientist but in the months and years to come we will begin to see and hear more of data scientists and Accounts Payable spoken in the same sentence and working together for mutual gain.
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