Ardent recently completed its annual AP-themed market research study, “The State of ePayables 2021: Operating in the New Normal”, which is part of an ongoing dialogue that the Ardent team has had with AP and finance leaders for more than a decade. If you’d like access to this report, make sure to register for our newsletter with a business email address.
A year ago, businesses were mainly focused on two major avenues: business continuity and resiliency. Those early months of the pandemic may still seem fresh to many business leaders, however, the progress made to fight the crisis evolved considerably over the last six months. Nonetheless, there is no question that there are lingering ramifications from COVD’s sixteen- month stranglehold on businesses (see chart below).
Areas Impacted the Most by COVID-19
Throughout 2020, AP played a critical role in maintaining enterprise liquidity and keeping suppliers paid, even with the vast majority employees working remotely or adopting a hybrid work environment. Now, with a firm level of hindsight, businesses participating in Ardent Partners’ 2021 State of ePayables research study stated that the most crucial outlets and links to enterprise liquidity, including sales, revenue, and cash, have been the biggest areas impacted throughout the entirety of the COVID-19 pandemic (35%). This represents a major opportunity for the AP group to capitalize on its unique position to impact cash management and assist the greater organization to support its areas under greatest stress, while also maintaining some semblance of normalcy and continuity.
Of course, AP has many outlets of value, but, supporting cash management strategies over the last decade has been one of the major reasons why the function has increased its bottom line impact and, as a result gained in stature. Accounts payable actively manages one of the biggest outflows of an enterprise’s cash. Throughout 2020 and in the midst of a unique crisis, AP was asked to provide financial visibility; critical business decisions, such as furloughs and layoffs, were linked to how the executive team reacted to evolving market conditions. These top-of-the-chain organizational leaders depended on their AP team to deliver the deep intelligence required to understand how internal and external factors would guide the greater enterprise’s path of continuity and resiliency.
The second area that felt the greatest impact from COVID-19 has been internal operations (25%), where new work-from- home mandates completely changed the ways that co-workers communicated and collaborated. Unable to rely on the regular office dynamics that were designed to foster interpersonal connections, AP teams were forced to find new ways to engage and support their business stakeholders. However, as many survey respondents noted, AP was simply one of many teams facing these new communication challenges. What was unique, however, for multiple AP teams participating in this year’s survey was that a need to deal with paper invoices made AP operations “essential” in the context of the pandemic and required staff to work in the office to ensure that suppliers could be paid.
To quote the Dalai Lama “Whenever there is a challenge, there is also an opportunity to face it, to demonstrate and develop our will and determination.” The past eighteen months have been like nothing else we have experienced in recent times. The accounts payable function was quickly thrust into unchartered territory but it did not let the obstacles placed in its path keep it down and prevent it from doing its’ job. AP departments worldwide persevered, rose the occasion, and delivered as they always do.
