[Editor’s Note: Ardent Partners recently published its annual AP-themed report, The State of ePayables 2019: Driving Value in the Age of 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).]
Over the last thirteen years, we have seen AP develop a much more strategic role within an enterprise. Today, access to timely and accurate financial data and reporting is helping AP leaders achieve that role. More robust data and visibility into the overall AP process mean AP teams are now in a better position for success than ever before. In Ardent Partners’ 2019 State of ePayables research we investigated the areas where data and intelligence are most utilized in today’s AP / finance teams. The top three areas where they are being used are:
Forecasting, budgeting, and planning (64%): The ability to drive full visibility into enterprise spend is an attribute that not only unleashes AP’s visionary expertise, but can propel AP and finance leaders to new and strategic grounds. With better visibility into invoice and payment data AP can turn that data into intelligence and provide it their functional partners and the C-suite to be utilized for critical planning, budgeting, and forecasting. The AP function is well-positioned to tackle these challenges through automation and invoice-based intelligence.
Cash flow analysis (61%): The ability to capture real-time invoice and payment data allows for a more accurate analysis of a company’s cash flow. Tracking and monitoring AP metrics such as invoice cycle times, the percentage of invoices received electronically, and other data inherent in AP, can also immensely simplify an enterprise’s working capital optimization. Greater visibility into the invoice-approval process means a group like Treasury can have a much better handle on the enterprise’s cash situation.
Fraud and compliance management (58%): Based on Ardent Partners’ research, 77% of AP leaders agreed that managing fraud and compliance is a critical capability that their organization needs to develop or possess. AP sits in an ideal position to identify and manage invoice and/or payment fraud and can be a perfect ally for compliance teams in identifying potential areas of concern and escalating issues internally. Utilizing data and intelligence to know and understand different transaction patterns, as well as helping to identify and prevent questionable or fraudulent transactions, is another source of value for AP.
Conclusion
There is a well of untapped financial and business data that is warehoused within accounts payable. If AP teams can extract this invoice and operational data, they can turn it into intelligence that can be utilized throughout the entire organization. Taking a data-driven approach is one of the best ways to accelerate P2P performance and drive more business value. As more responsibility falls under the AP operation, the function has the opportunity broaden its influence and make a larger impact.
