This is really a continuation of the last article which focused on trends & predictions for 2014 around technology in the AP/P2P space. Today, I wanted to continue the discussion by laying out what we have identified to be the hot button issues for AP leaders in 2014.
Hot Button Issue #1 – Supplier communication & interaction
Today, more than ever before, suppliers are viewed as partners and an important part of the extended enterprise. Over the last decade, companies of all sizes have become more dependent on their extended enterprise in order to successfully deliver goods and services to their end customers. Global supply chains have evolved into highly complex and interdependent businesses relationships that necessitate closer connectivity between trading partners.
Managing these partnerships in a manual manner is not going to cut it anymore and AP is responsible for a critical part of the relationship with a supplier – invoicing and payment. During this part of a transaction, communication, visibility and connectivity are becoming more and more valuable and are key to ensuring a cost-effective and streamlined process. What happens during this process, however, also has an impact on procurement and its supplier relationship/information management objectives and on treasury’s cash management objectives.
Hot Button Issue #2 – AP’s value within the P2P Process
AP leaders in 2014 must assess their group’s value from an overall procure-to-pay (P2P) perspective. In many enterprises today the procure-to-pay process is disconnected from a process and systems standpoint, making it difficult to get a clear and holistic view of the entire process.
This is why AP leaders together with their procurement counterparts must evaluate where there are opportunities to better connect the P2P process within their organization. A more cohesive P2P process has a whole host of benefits including improved spend visibility (and spend data), prevention of savings leakage (e.g., matching contracts to invoices), working capital optimization (e.g., capturing discounts), etc. AP has an important role to play in process efficiency and data quality and accessibility.
Hot Button Issue #3 – It’s time to outsource low value-add activities.
In the world of AP, low value-add activities include things such as scanning (or imaging) or manual data entry and this is where a large chunk of resources are used. For most AP groups, scanning is not core competency, however, for many third-party providers whose main business is scanning; it is in fact an expertise. Scanning an invoice by itself doesn’t do much to automate the AP process; an image of an invoice still requires manual data entry. Capturing the data and converting it into an electronic format (data capture) adds value. Even though not 100% accurate, using OCR to capture information and automatically enter it into a system saves a lot of time and effort. This saved time allows AP staff to focus on managing (and reducing) exceptions, improving straight-through or touchless processing, enhancing data for use in procurement or treasury and many more value-adding activities. So, this year, focus on removing the low-value add activities from your AP department.
