Procure-to-Pay (“P2P”) technology is currently riding a wave of innovation as more and more business executives (within both the procurement and finance functions) seek to not only make financial and purchasing transactions more efficient, but also seek to boost other areas of the organization via the robust nature of advanced P2P platforms. This point indicates that Accounts Payable (“AP”) is capable of driving holistic technology projects while also delivering greater technological value. P2P systems today can be deep sources of intelligence and are proving to be differentiators for the teams that leverage them.
When visibility and a cohesive management plan are added to this process, the treasury group, a key stakeholder in the P2P process, can become proactively engaged to help guide the decisions that align the management of the enterprise’s cash across this process with the overall needs and objectives set by the CFO. Simply put: the majority of today’s AP leaders should be laser-focused on pushing their functions into the P2P mix and serving as a convergence point for a burgeoning area of the enterprise.
Ardent Partners research has consistently shown that transforming an AP department is a worthwhile undertaking that can deliver significant bottom-line value while also elevating AP’s place within the organization. To maximize the value created from their efforts, AP leaders must pursue a transformation that incorporates people, processes, and technology and extends across the entirety of their department’s operations.
Today’s leading AP programs are designed, developed, and primed to improve collaboration with internal and external stakeholders, enhance how treasury and other finance functions manage working capital and cash, and cultivate a “smart” environment in which the data and intelligence culled from AP processes and systems drives more educated and impactful decisions. To fully realize the opportunities available across the entire value chain, AP transformation projects must address the full scope of operations.
AP and other project stakeholders should examine the full AP workflow from a “bird’s eye view”, which can uncover previously hidden process efficiencies, as well as pathways for greater strategic impact. An integrated payables approach can drive greater cost savings through a further reduction of inefficient, manual activities. This, in turn, helps the business increase competitiveness and reduce expenses. Looking at the invoicing and payment processes as two sides of the same coin can also lead to greater visibility into AP’s financial and operational data. An increase in data visibility can lead to richer cash forecasts, improved spend analytics, and tighter collaboration between AP and other enterprise stakeholders.
An integrated payables approach can enable greater flexibility in invoice approval and payment scheduling, which can open up the possibility of leveraging advanced financial solutions – such as supply chain finance and dynamic discounting – to drive a direct impact on the enterprise’s bottom line. These financial results can occur without an integrated approach, but taking in the full view streamlines these activities considerably and allows AP to move farther away from its tactical past and toward a strategic future.
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