Given their recent performance, many AP teams are destined for greater things, supported by the growing perception of the function as adding real value to the enterprise at large. However, the path forward in 2022 is paved with more hurdles standing between AP organizations and their targeted results for this year. The modern AP function’s biggest issue for many years was the enormous challenge of handling and managing too many paper invoices and payments.
The “persistent paper problem,” which has been described numerous times in Ardent’s ePayables research through the years, had a domino effect on other operations across the business (and within both finance and procurement). But things have changed. “Having too much paper” in the department is no longer a top challenge. That said, all of the top challenges this year are tactical problems created largely by having processes that are mostly, if not completely, paper- or manual-based.
AP’s Top Challenges in 2022
In the world of AP, the phrase “time is money” is a literal fact — the more time it takes a department to approve invoices and payments, the more money it costs to do so. While AP’s perceived value continues to increase, it is a dirty little secret that a near majority of AP teams are dealing with classic challenges, like lengthy invoice/payment approval times (47%), which prevent teams from tackling more strategic work. For those working in a manual environment, the operational workflow of the entire AP process takes much too long. With tactical pressures continuing to threaten the strategic value of many AP units, teams must respond with technology- and program-led initiatives to reduce the time and cost of processing invoices and payments.
In 2022, the “high percentage of invoice exceptions,” was noted as a top challenge by 45% of all AP organizations. Invoice exceptions can slow processing to a crawl, creating detrimental bottlenecks that can dramatically reduce efficiency and effectiveness. That this pressure remains near the top of the “major challenges” category almost every year of Ardent Partners’ annual ‘State of ePayables’ research study is telling. Because even as AP begins to deliver more value and tackle strategic opportunities within the greater enterprise, departments that lack a clear solution to greatly reduce exceptions inevitably hit a performance ceiling much sooner than their peers.
