[Editor’s Note: Ardent Partners recently published its AP-themed report, “Accounts Payable 2022: Big Trends and Predictions”. Over the next few weeks, this site will feature articles highlighting the key discussion points from the report.
Prediction #5: AP Becomes an Intelligence Hub
AP sits on a veritable goldmine of data due to its direct access to spend and financial information; the downstream flow of invoices and payments is an incredible channel for transactional data that can paint a vivid picture of what is happening across the organization from a spend perspective. Unfortunately, access to this information has long gone untapped for most AP organizations due to the constraints of paper-based, manual processes, and disparate systems, not to mention having the tools, time and resources to actually dig into the data.
The situation, however, is starting to change as investment in AP automation solutions has ramped up in recent years and will continue to do so into the future. Moving beyond simple process automation, AP teams will more and more serve as an intelligent hub of information for other stakeholders across the typical organization, supplying insights and knowledge that can help business leaders make better, timelier, informed decisions with on-demand financial intelligence.
Prediction #6: AP and Treasury Become Strategic Partners
AP and treasury make for natural partners in the enterprise, which is especially true given that treasury is tasked with managing enterprise cash and AP is fundamentally a source of enterprise cash outflows. In fact, supplier payments—which AP controls—are frequently the largest single source of cash outflows in many organizations.
Having visibility into, and management of, this source of cash outflow can be critical to treasury’s cash and liquidity management goals. If AP makes a supplier payment that is not aligned with the enterprise’s cash management strategies (something which can easily occur), then this interferes with the amount of working capital available to fund other enterprise initiatives.
Additionally, AP’s financial and operational data can inform better financial planning and forecasting on the treasury side. Data visibility is paramount in today’s business world, and more information can always benefit both sides of the equation which is why we see AP and Treasury becoming strategic partners in 2022.
Prediction #7: Supply Chain Finance Utilization Increases
Cash management is a critically-important piece of the corporate puzzle. Traditionally, buying organizations have been the ones leveraging supply chain financing for their benefit. However, the rise of cloud-based solutions and FinTech offerings tailored to the needs and wants of suppliers, rather than buyers, will make supply chain finance more accessible to all and result in increased adoption and utilization of supply chain financing options in 2022. SCF can be a powerful cash management tool and it is imperative that today’s AP, AR, and finance teams understand the current solutions available and how they can be integrated into current cash management activities.
