Editor’s note: On April 16, Ardent Partners will host a complimentary webinar (sponsored by Concur) focused on the top trends in accounts payable for the year ahead (register at this link). Ahead of that presentation, run by Andrew Bartolini, Ardent’s chief research officer, and Christopher Dwyer, research director, we’re running a short series on the four biggest accounts payable trends in 2015. Today’s article, second in the series, details the trend toward a stronger partnership between procurement and accounts payable.
Collaboration is the name of the game in the modern enterprise, between both internal departments and external suppliers. Perhaps nowhere is collaboration more important, however, than in the procure-to-pay (P2P) workflow, especially given that the process flows through two departments—procurement and accounts payable (AP)—that historically haven’t worked closely together…even though the benefits of this union are quite clear. Nearly 70% of survey respondents in Ardent’s ePayables research expect to see a stronger partnership between AP and procurement over the course of the next year, which marks this as a critical trend moving through AP in 2015.
Why AP and Procurement Should Have a Tight Partnership
When looking at the P2P workflow, it’s important to recognize the two distinct aspects of the process. The first, “procure,” involves sourcing and other activities the procurement team handles; the second, “pay,” is the realm of the AP team and its associated invoice approval process. When there are connecting threads that run through the P2P process, both AP and procurement are able to perform their respective jobs better.
The financial data that AP controls can assist procurement with making more educated sourcing decisions. If a supplier routinely makes mistakes on their invoice, for example, tighter collaboration between AP and procurement means that the procurement team has access to this information and can act on it. Conversely, AP having access to procurement’s contract information could assist in matching the invoice to multiple documents during the approval workflow. It’s also increasingly an economic reality that procurement and the AP/finance team need to talk more often so procurement can make more financial-backed decisions and AP can gain the kind of view into contracts that assists with record-keeping and ensuring invoices have the correct information on them.
Improved data and visibility into that data can also benefit procurement’s spend management goals. The data pulled from accounts payable systems can provide real- or near-real-time, hard-line data into the organization’s spending habits, patterns, and trends—all of which can better inform procurement’s spend analytics tools, which can result in more effective spend management programs in the long term.
Final Thoughts
It’s an economic reality that the Chief Procurement Officer and Chief Financial Officer must increasingly be on the same page to drive enterprise results. Because of this, a tighter collaboration between procurement and AP will soon no longer be a question: it will be a competitive necessity for enterprises of many sizes. It’s also critical that each group have the requisite tools and information to improve management of their respective areas, finance and suppliers, which can only be helped by tighter collaboration between the two groups.
Check out these related articles for more:
AP’s Top Trends in 2015: The Increasing Automation of Accounts Payable
Accounts Payable: Top Trends for 2015 (Webinar)
