[Editor’s Note: Ardent Partners recently published its Accounts Payable-themed report, “The State of ePayables 2025: AP’s Unfinished Journey.” Over the next several weeks, this site will feature our series highlighting key AP management strategies and top priorities for 2025.
The Future of AP: Dependent on Automation, Agility, and Intelligence
AP teams must work vigilantly to get their houses in order; but process efficiency and compliance, while still bedrock AP principles, are fast-becoming table stakes in a poker game with no limit. The keys to the castle will ultimately be given to the AP teams who can anticipate and adapt to dynamic change within their organizations and within their supply chains. Nonetheless, an AP department’s ability to drive process standardization and general efficiencies across the entire operation has been a defining characteristic of Best-in-Class performance for much of the past two decades.
In 2025, the objectives of today’s AP departments continue to grow and expand in scope and impact. For most AP groups, however, the drive to become a strategic and impactful function is clear and the distance to that goal remains significant. For most, improvement hinges on the breadth and depth of the transformation activities that each AP team can scale. There are many next-level attributes that contribute to a broad-based AP transformation and ultimately enable future success. Ardent Partners research indicates that there are several key factors that are essential for today’s AP executives and professionals on their ongoing journey (see Figure 11). These are the organizational attributes and elements that AP leaders believe will propel their organizations to the next level of performance:
- “Smarter” enterprise systems: Seventy-two percent (72%) of AP leaders see smarter systems as essential for removing friction ly workflows. These technologies can automatically route invoices, flag anomalies, and adapt to changing business rules without heavy manual oversight. By reducing the time and effort spent on routine processes, smarter systems allow AP teams to focus more on value-generating activities. Next- generation technology has been identified as the number one catalyst for future success.
- Deeper, more agile analytics: Forty percent (40%) of AP leaders believe that better analytics will propel their teams to the next level by enabling them to get more actionable intelligence out of their data. The AP organizations that truly put their weight behind efforts to become more agile in nature will benefit down the line.
- Eradication of tactical tasks: For the first time, this element was identified as a top driver of future success, with 39% of all AP leaders admitting that their overall potential is stunted by the sheer volume of manual, low-value work. Eliminating these tasks frees time and talent for higher-order projects and proactive collaboration with key stakeholders.
The Accounts Payable Benchmarks
For 20 years, the author of this report has delivered detailed performance metrics for finance executives and AP leaders to benchmark the performance of their AP operations against the market. When viewed year by year, the progress of the profession, while positive, appears painfully slow. But over longer timeframes like five, 10 and 20 years, the improvements are inspiring. The 2025 metrics were no different.
Smart AP, P2P, and finance leaders also know that the best way to understand and communicate the impact that an AP transformation has on business operations and results is to begin measuring and tracking their department’s performance. Ardent Partners ultimately recommends that every AP leader reading this report develop and use a series of “AP Metrics that Matter” for exactly that purpose. Readers can reference the values in Table 1 as important markers on their overall AP journey.
- Less time and lower costs, together, are formidable. For many working in AP, it takes too long to process a single invoice while costing it too much money to do so. Applying a $9.84 average invoice processing cost to the thousands or tens of thousands (or more) of invoices processed each month by AP should approximate an average AP department’s budget. While average invoice processing times (8.2 days) have dropped nicely, it should be noted that there has been wage inflation over the past five years.
- Accentuate the positive. Supplier enablement figures continue to improve. One by-product of the pandemic (as it relates to business) was a sharp decrease in in-person meetings. As more businesses conduct the majority of their business with suppliers through digital means (i.e., online meeting and negotiations), it makes sense that a majority of suppliers (57%) can now send invoices electronically. This metric helps improve the touchless or straight-through processing average, which is also trending up.
- Eliminate the negative. AP groups have a long way to go to solve their invoice exception problem. The invoice exception rate for AP departments is, on average, 18.4%. Exceptions are typically the biggest single reason why the benchmarks in Table 1 are not lower. Additionally, the amount of staff time dealing with suppliers overall (21.9%) is in no small part caused by exceptions. They continue to be the bane of AP’s existence.
Best-in-Class AP Performance
Twenty years ago, Ardent Partners analysts developed a unique framework to highlight the performance of top-tier organizations (referred to as the “Best-in-Class”) by analyzing a specific set of performance benchmarks. In the decades that followed, Ardent Partners has defined Best-in-Class performance as the 20% of enterprises with the lowest average invoice processing costs and shortest average invoice process cycle times. These top- performing groups have taken their AP operations to the next level by leveraging technology to streamline the AP process, making it more efficient and enabling more strategic activities. Best-in- Class enterprises have demonstrated their ability to drive superior performance across the AP metrics that matter and their annual results are proof that AP can finish its journey and generate a lasting impact on financial operations and the enterprise’s bottom line.
The metrics outlined in Table 2 represent the culmination of the Best-in-Class AP teams’ skills and efforts and stand in sharp contrast with those of the “All Others” maturity class. Achieving greatness in AP is possible, and it is the AP leaders and teams who develop the ability to consistently combine innovative strategies with underlying technologies and an ability to execute who will continue to reap a competitive advantage and challenge the conventional wisdom of what is possible for AP.
Best-in-Class AP teams achieve per-invoice processing costs that are 79% lower than their peers, and invoice processing times that are 79% faster than all other groups. Their invoice exception rates are 47% lower than the rest of the marketplace. Notably, Best- in- Class enterprises have 1.4 times more of their suppliers enabled to submit electronic invoices and, as a result, process more than 1.8 times as many of their invoices in a straight-through manner than their peers, which greatly contributes to their strong performance across all metrics. Best-in-Class staffers spend roughly half as much time on supplier inquiries.
AP executives and professionals can gain a rewarding and strategic outcome if they understand the inherent value in AP transformation, push the envelope in regards to innovation, and serve as a point of convergence in the months ahead. To complete these objectives, today’s AP departments must follow the course developed by Best- in-Class organizations and the AP programs they have cultivated, by building on core competencies and capabilities, cash management approaches, supplier management principles, and intelligence-led strategies. The rest of this chapter will highlight advantages that enable Best-in-Class AP teams to excel.
