Warren Buffet, the legendary investor once said “Someone’s sitting in the shade today because someone planted a tree a long time ago.” What does this have to do with Accounts Payable? Everything. Now is the perfect time to look forward and plan what you want AP to look like tomorrow and into the future. Developing your 2021 plan requires taking a look back to see where you have been and how you performed. AP leaders should use their learnings from the current disruption to better prepare for future disruptions. As 2020 showed us, what were originally considered once-in-a- lifetime events may become part of modern, everyday life. Proper planning will provide leaders with the confidence to handle future, unknown events. Building on the topics we covered last week (click here to read Part 1), here are some additional thoughts and areas to consider when creating your 2021 plan:
- How well were your AP and P2P functions prepared for the events that transpired in 2020 and are still very much a concern? Did you have disaster recovery and continuity plans in place you when the Pandemic struck? I spoke with AP professionals from enterprises large and small over the past 12 months and without fail, those that had disaster recovery plans in place fared far better than those that were caught unprepared. If you don’t have a formal disaster recovery plan in place, now is the perfect time to begin working on one. If you have one in place, please remember that it is good to review it on a regular basis, whether that be every six months or annually, to make sure it is up-to-date with any changes that may have occurred.
- Push AP to become more forward- thinking and strategic. While a majority of businesses view AP as a vital piece of overall enterprise operations, the “perception problem” still persists for many. It may be a frightening realization: AP will always have to battle to be considered a critical function in the eyes of all enterprise stakeholders. However, this only means that no matter how far AP progresses over the next few years, it must avoid complacency and push further still.
- Collaboration is critical for businesses to survive and thrive. AP needs to work with key stakeholders (procurement, treasury, finance, business units, suppliers, etc) to identify and fix any critical operational and strategic gaps. Today’s leading AP programs are designed, developed, and primed to improve collaboration with internal and external stakeholders, enhance how treasury and other finance functions manage working capital and cash, and cultivate a “smart” environment in which the data and intelligence culled from AP processes and systems drives more educated and impactful decisions.
- Develop more robust data and intelligence capabilities. Information culled from AP-specific operations (namely invoice- and payment-processing) can be incredibly valuable to the CFO, treasurer, and the entire procurement team (especially today). Accounts payable departments in the 2020s must evaluate their current reporting and business intelligence capabilities and develop robust plans to enhance how they collect, analyze, and present intelligence. They must also develop and enhance relationships with the consumers of AP intelligence to optimize overall performance.
- Accelerate automation efforts. The benefits of AP automation were never more obvious than when the pandemic hit and business had to shift a work-from-home environment. Make technology adoption a priority and mandate its use. No AP function will be able to evolve without a foundation of seamless and holistic processes borne via automation and the utilization of core invoice-to- pay technology. Accounts payable and finance leaders, regardless of their stance on how it will be received, must mandate the usage of these solutions to ensure visibility, consistent process workflow, and, the ultimate elimination of manual tasks. At the end of the day, a mandate for the utilization of technology is a strategic move to improve the overall AP function.
I started this post with a quote so I thought it would be appropriate to end with one as well. Yogi Berra, well known not only for his Hall of Fame baseball career but also for his paradoxical statements once said “If you don’t know where you are going, you’ll end up someplace else.” It’s safe to assume that Yogi wasn’t talking about AP but nonetheless, his words and meaning are clear (at least to me). Being prepared for the future doesn’t happen by chance, it requires planning and work to end up where you want and need to be.
