Over the past decade, Ardent Partners research has consistently shown that transforming an Accounts Payable (AP) department is a worthwhile undertaking that can deliver significant bottom-line value while also elevating AP’s place within the organization. To maximize the value created from their efforts, AP leaders must pursue a holistic transformation that incorporates people, processes, and technology, and extends across the entirety of their department’s operations.
For the AP departments that remain mired in manual, paper-based processes, the question before them is no longer if AP should be automated, but rather when and how quickly. Like any worthwhile endeavor, it takes time to prepare for the journey (understanding the current process, knowing your goals and objectives for a new system, presenting a strong business case, defining requirements, selecting the right technology, implementation and ensuring user adoption), but it has never been easier to automate part or all of the AP process. Broad improvements in functionality, usability, integration, cost, and general accessibility over the last few years in the AP automation market have combined to provide AP groups with a clear roadmap for improvement.
Ardent Partners has created the ePayables Framework, (which we have written about here) that breaks down the AP process into multiple sub-phases, but in reality, it is all part of a single workflow with stages that are inextricably connected. This approach to AP transformation – known as “integrated payables” – is important for enterprises looking to capture AP automation benefits that positively impact the full scope of their operations.
Enabling Strategic AP Operations
A holistic perspective on transformation allows AP and other project stakeholders to examine the full AP workflow from a “bird’s eye view” and uncover previously hidden process efficiencies, as well as pathways for greater strategic impact. An integrated payables approach will drive greater cost savings, control, and compliance within the payables function. This, in turn, helps the business increase competitiveness and reduce expenses. Looking at the invoicing and payment processes as two sides of a single coin can also lead to greater visibility into AP’s financial and operational data. Enhanced data transparency can lead to better cash flow forecasting, improved spend analytics, and tighter collaboration between AP, Finance, Procurement, and Treasury. Ardent recommends the following strategies and approaches for AP departments seeking to improve their performance and transform their organization’s value and position within the enterprise:
- Develop a long-term roadmap for AP transformation that incorporates the people, process, and technology components of the overall operation.
- Take a holistic view of the end-to-end AP process (“integrated payables”) when developing any transformation and improvement effort
- Establish clearly-defined and quantifiable business goals and desired outcomes
- Engage and include stakeholders like treasury, procurement and business units in the development of the business case for transformation
- Track innovations in the ePayables technology market
Final Thoughts
Successful AP transformation projects do not simply happen; they require executive sponsorship, a clear blueprint, the investment of time, money, and resources, as well as solid execution. The most direct and effective path to AP excellence begins with a plan that looks across the entire process and incorporates and prioritizes the requirements of all AP stakeholders. By taking a holistic approach to transformation efforts and by leveraging technology to higher degree, AP and finance leaders will be able to impact a larger portion of their processes and deliver greater value.
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