While AP’s momentum continues to build, there is more work to be done to keep improving perceptions and have AP viewed more favorably within the enterprise. In 2021, AP groups are rarely first in line to receive budget increases and special project approvals. But the truth is that AP does not have to be “first in line” for its position to be significantly improved, it merely has to be “considered.” That said, with the wave of innovation that has recently swept across the business landscape, it will be increasingly important to the longer-term success of every AP department that it be viewed in a way that is more similar to other strategic business functions and therefore, worthy of investment.
With two-thirds of enterprises promoting the value of AP over the last year, AP has become an area of investment. Most directly, this was shown when in 2020, the AP automation market became as hot as any other in the enterprise software industry. This also refreshingly means that in 2021 and 2022, there will be money and resources to invest in AP. This means that AP teams have an increasingly higher likelihood to achieve their top priorities which cover the full spectrum of organization needs.
- More and Better Data (55%) which is achieved by improving the overall level of reporting and data analytics capabilities available within AP. This realization that AP can be a “hub of intelligence” is active and continues to grow within the profession but also beyond it, more broadly in finance. The AP process creates and captures a veritable gold mine of information, including the data linked to the invoices and supplier payments the function processes. For example, AP’s data can be an incredible benefit for treasury departments that want to leverage deep intelligence as a way to improve their supplier payment strategies. Any improvements in the way AP collects and analyzes transactional data has the potential to boost its overall strategic value.
- Less paper and human touch (41%) which is achieved by eliminating paper invoicing and reducing manual tasks via automation. For AP to achieve its main goals and objectives, it must eliminate the enemy: paper invoices. Manual tasks and paper-based processes slow invoice processing, limit data intelligence, increase the risk of fraud and payment errors, and reduce the chances for early payment discounts. Eliminating these AP-specific issues will unburden the function and allow it to contribute to more strategically to operations.
- Fewer paper invoices (36%) which is achieved by enabling more suppliers to submit invoices electronically. The path to fewer paper invoices is thus – Step One: Automate AP processes; Step Two: Enable suppliers on the technology; Step three: Keep repeating Step Two. Enabling more suppliers has been an important priority for procurement for more than decade, but it has never been a “top three” priority for AP in the sixteen years that Ardent Partners analysts have has been covering the space. That is because more AP teams had yet to perform Step One. During the pandemic, however, many AP professionals dealing with manual processes had to return to their offices to open envelopes and route invoices for approval and/or scan-and-capture the paper invoices. AP automation eliminated this need for many enterprises. No business wants to put its workers in harm’s way and having to deal with paper invoices was it was a harsh lesson for many finance executives.
