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 details the most significant: the increasing automation of the accounts payable function.
Despite the increasing levels of automation that have occurred in many other enterprise departments (such as procurement, HR, etc.), the accounts payable (AP) function remains a stubbornly-manual process in many organizations. However, as enterprises have begun to think more holistically about the entirety of the procure-to-pay (P2P) workflow, technology will become more and more of a critical differentiator. In fact, 83% of respondents from Ardent’s 2014 ePayables research survey expect that the AP process will be largely automated within the next two years.
This high expectation should come as no surprise: there’s a new recognition in the enterprise that AP isn’t solely where invoices are sent for approval. Rather, AP can now be considered a “hub” for greater visibility, intelligence, and efficiency across multiple financial management avenues. Given that all the enterprise’s invoices pass through the AP function, automating the approval process has the ability to add a new level of visibility into the enterprise’s cash position, as well as driving intelligence related to key spend patterns and trends (for forecasting and budgeting purposes). Automating the accounts payable function, along with other cogs in the financial ecosystem (including payment, accounts receivable and cash management), can also contribute to a truly holistic workflow from invoice receipt all the way through to payment and other back-end analytics.
Enterprises that rely on archaic, manual, or disconnected P2P workflows will only be able to capture a fraction of the value that automated AP programs have experienced. This includes early payment discounts, which can provide a significant financial advantage to enterprises (check out this early payment discount example for more details), not to mention the resulting poor cash visibility that comes from largely-manual processes. Full automation throughout the AP workflow can also contribute to the evolution of procurement and finance collaboration, which is yet another strategic differentiator for many organizations.
Technology and automation are core differentiators in transforming AP from a back-office function into a strategic, well-valued partner of procurement and other key stakeholders. This alignment can significantly impact the greater organization via access to real-time financial data, information, and intelligence that can be leveraged for smarter business decision-making.
Check out these related articles for more:
Accounts Payable: Top Trends for 2015 (Webinar)
5 Critical Ways Scan-and-Capture Takes Cost Out of the Enterprise
Two Approaches to Building a P2P Process
