Editor’s Note: Ardent Partners recently published our annual AP-themed report, The State of ePayables 2017: The Convergence of Cash, Suppliers, and Intelligence. Today’s article is part of an on-going series focused on the report’s key findings. If you would like to get the full report, it is available for download here (registration required).
The Next Generation of Accounts Payable
Innovation defines today’s business environment with new enterprise technologies entering the business world at a never before seen pace. Many of these innovations are heralded as “the next big thing” to radically transform the business world. But the reality is that with many of these solutions, their impact won’t ever be able to match the hype. However, it is clear that technological innovations will still make an impact on the Accounts Payable (“AP”) function. Through Ardent Partners’ research, we have ranked a series of the most promising innovations that will have a role to play in the long-term transformation of the AP function. Some of these technologies are available and being used by AP teams today, while others are still emerging within enterprise solutions and/or still developing their own unique market.
The Elements of Innovation, Ranked
- Mobile applications for approving invoices. Smartphones and tablets play a critical role in how business leaders execute their daily operations. From engaging talent to generating real-time information and insights, mobile applications represent an on-demand means for functions like AP to move forward. AP leaders and business stakeholders now have access to AP automation systems while away from the office and can easily view and approve invoices on mobile devices. Ardent’s research has shown that Best-in-Class organizations are nearly twice as likely as all other businesses to leverage mobile applications for invoice entry, invoice approvals, and retrieval data. Mobility represents a great way to enact these key AP processes without access to larger enterprise systems.
- Blockchain technology has emerged as a critical component of the cryptocurrency marketplace, but only recently has it started to generate interest in the business world beyond bitcoin. This digital database can operate as a ledger and to facilitate business processes that involve multiple parties (click here for a more in depth description of blockchain technology). Blockchain has the potential to increase efficiency, fidelity, and security of transactional and logistical data that is exchanged between trading partners in a B2B environment. For AP it could become an all-in-one purchase order, requisition, and invoice that links upstream processes (sourcing and procurement) with downstream payment remittance. Blockchain is an emerging platform that Best-in-Class AP functions are beginning to utilize. It will be interesting to see blockchain’s place in the market as it becomes more relevant in the near term.
- Robotics and robotic process automation (RPA) do not represent a death knell for AP staff, but should be viewed more as a talent augmentation. RPA has the potential to remove manual and tactical measures up-front and extract and classify key data within invoices. This information can be completely digitized into intelligence for enterprise stakeholders to utilize in real-time. Invoice-processing, supplier inquiry management, payments, and analytics are all areas that RPA can enhance and help put AP on a great path to the future. Best-in-Class businesses are 2.6-times more likely to harness the power of RPA as part of their AP strategy and programs. RPA minimizes human intervention and helps to eradicate lost time spent by employees on things such as exceptions.
- Agile analytics represent the next wave of Big Data-led strategies that can generate true financial intelligence. Agility within AP analytics can help change how invoice data is collected, prioritized, and utilized. This will help key stakeholders in areas like procurement, finance, and treasury collect information needed to address business challenges. The Best-in-Class are nearly three times as likely to utilize agile reporting dashboards that can support AP intelligence efforts. Big Data management is now a real and impactful strategy that utilizes intelligence for executive planning and decision-making. Embracing data and intelligence by leveraging next-generation analytics will help AP leaders solve many of the current business challenges they face.
With all of the new strategies and technologies available, it is hard not to be excited for the future of the modern AP unit. But that is not to say the road ahead will be easy. For many AP departments, standardizing basic processes and executing with a basic level of proficiency is still a struggle. Transforming internal operations takes a commitment of energy and resources. But it is a worthwhile pursuit that can deliver long-term operation advantages if achieved. The initial gains from process automation can be a great achievement. But once that has been accomplished, it is time to look ahead and incorporate innovation and technological advancements as additional value drivers. When the innovations described above fully take hold in the market, the groups that are best equipped to take advantage of them will be the ones that already have core AP automation processes in place.
Download the new report here, and learn more about the future of the AP function and the promising innovations that take it there.