Editor’s Note: Ardent Partners recently published our annual AP-themed report, The State of ePayables 2017: The Convergence of Cash, Suppliers, and Intelligence. Today’s article is part of an on-going series focused on the report’s key findings. If you would like to get the full report, it is available for download here (registration required).
The Future of Accounts Payable
It has always been important for an Accounts Payable (“AP”) leader to drive process standardization and general efficiencies across their entire operation. In fact, it has been a defining characteristic of Best-in-Class performance for the past decade. But as the objectives of today’s AP departments continue to expand (in both scope and drive), it is important that AP professionals understand the breadth and depth of the transformation activities that their teams can scale. Ardent Partners’ research shows that there are four key elements that are essential for AP executives as they continue to grow the position. These are the four elements that AP and finance leaders believe will help their teams perform a complete makeover and craft the next-generation approach to their talent, operations, and systems.
The Four Essential Elements for AP’s Future Success
- “Smarter” enterprise systems: Traditional enterprise systems can still drive tremendous value to the greater enterprise by automating key processes, providing much-needed data at certain organizational intervals, and serving as the centralized system of record for essential information. But today, new advanced and “smarter” systems, like cloud-based software, artificial intelligence type systems, and the “Future of Work” are available and can offer new and innovative functionalities. Simple automation will no longer be enough to drive AP forward. Utilizing these next-generation processes will provide a catalyst for future AP success.
- Deeper, more agile analytics: Business agility, which remains a primary objective for most executives, is supported by one crucial dimension: intelligence. AP functions now require deeper analytics platforms that can provide more information/metrics into areas like enterprise spend, supplier information, and financial transactions (such as invoices). If AP is able to get more out of this data, business leaders will have the necessary intelligence to react in an agile fashion to new and unseen market pressures. The business world today is driven by data and the insights, foresight, and execution that are enabled by it. The AP leaders that put their weight behind efforts to collect and leverage data through analytics platforms become more agile in nature, and are the ones that will benefit the most down the line.
- Executive support for an AP transformation: In order for any AP organization to complete its transformation, executive stewardship will be necessary to guide and support the journey. This includes backing and investment in items such as new talent, enhanced technologies, improved access to internal stakeholders, and other resources that can help propel the function forward. Too many business functions operate without a true champion behind the scenes to provide resources when new issues arise. To get this support, AP departments must prove they aren’t just a “back office function,” but they can provide strategic value to the enterprise.
- Enhanced collaboration with key stakeholders: Tighter coordination with key partners across the greater organizational spectrum is always going to be a critical element in the ultimate success of an enterprise function. And as the name of our report suggests, the AP unit in particular, sits in a perfect spot to collaborate with functions like procurement (for sourcing and spend management improvements), finance (for improved visibility into corporate budgets and timely reporting), and treasury (enhanced cash management). Those that are the most successful at combining processes, systems, and organizations will be better able to optimize working capital, improve supplier relationships, and identify better sourcing opportunities through more accurate spend data.
Summary
While it is important for AP teams to still work to get their houses in order through process efficiency and compliance, these principles will only set up AP departments for basic functionality. To truly become a more strategic player within an enterprise, AP teams must learn to adapt to the dynamic changes within their organization and within their supply chain. Understanding the importance of next-gen technologies and analytics, gaining executive support, and collaborating with the other key stakeholders of the enterprise, will help send AP beyond the basics and into the future of the role.
Download the new report here, and learn how to put the modern AP function in the best position to generate true strategic value for today’s businesses.
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