Last month, Ardent Partners completed its annual AP focused market research report – ePayables 2012: The State of The AP Market. This extensive piece of research, which took up most of my time over the last few months uses data gathered from approximately 220 organizations and captures the strategies, performance and intentions of AP departments in 2012 (and beyond). Here is a little flavor…
The view of the AP department within most enterprises typically falls under the ‘if it ain’t broke, don’t fix it’ rule. But, there is a clear difference between working and working well. For most enterprises participating in this research effort, their AP process is not broken, per se – AP is working; however, most have significant opportunity to improve their efficiency and effectiveness to get AP working well.
The report shows that 45% of all invoice payments are manual. The reduction in manual payments has been a growing trend over the past few years and represents a steady improvement. The same cannot be said for invoices; however, as 71% of all invoices received by AP departments in the market today are in paper format.
High paper volumes remain a key indication of the manual, fragmented, and inefficient processes that cause processing delays and payment errors and make it all but impossible to gain timely and accurate visibility into invoice and payment data.
High paper volumes constrain an AP department’s ability to positively impact the management of an enterprise’s cash as well as the overall effectiveness of its financial operations.
High paper volumes, in a word, are a major part of the overall AP problem.
The good news is that a vast majority (86%) of AP groups in the market today understands the “paper problem” and plans to focus on it in the short-term and increase the percentage of electronic invoices received over the next two years. Similarly, enterprises expect a shift towards electronic forms of payment over the next two years, primarily ACH and P-Cards due to not only lower processing costs but also the increased control and visibility that they offer.
If you have a chance, please do look out for this report which was made available due to support from American Express, Ariba and Syncada.
