It is with great pleasure that Ardent Partners announces the publication of its latest state of accounts payable (AP) research report—“ePayables 2015: Higher Ground.” Like the annual reports that came before it, the 2015 ePayables report focuses on the state of the AP function as well as assessing how AP teams leverage ePayables solutions to improve business results and offering up Best-in-Class metrics that allow readers to benchmark their own operations against top performers. (The report is available for download here, here, here, here, and here.)
Moving From the Tactical to the Strategic
In years past, accounts payable has functioned as little more than a transaction-focused department with the aim of processing invoices as quickly and efficiently as possible. As a result, many organizations began AP transformation with a hard look at how best to reduce costs in the AP operation. Tactics such as implementing scan-and-capture solutions as well as automated routing and workflow can help move organizations toward this goal—at least initially—and more advanced solutions, such as eInvoicing, can take even more cost out of the business.
In the Ardent Partners ePayables 2015 study, however, the goal of reducing processing costs dropped out of the top spot among accounts payable’s priorities. In the 2014 study, 63% of respondents noted that reducing processing costs was their top goal in the year ahead; a mere 37% of respondents in the 2015 study noted the same thing a year later. This is a 41% drop in a year—a clear sign that the tactical activity of reducing costs is no longer the top objective that it once was.
This decline in a focus on costs signifies that enterprises are beginning to look at AP as a more strategic function, rather than a purely tactical one. The idea of AP as a strategic value driver is further borne out by the 40% of respondents who noted that improving reporting and analytics is their top priority in the year ahead, which makes clear the shift in thinking that is going on at a plethora of organizations. Accounts payable is finally, at many enterprises, moving out of the back office and being viewed as a team that can drive proper strategic value to the wider business.
This can only be good news for the organization generally and AP specifically. Accounts payable is a significant source of cash outflows in most enterprises, particularly when it comes to supplier payments. Any improvement in reporting and analytics related to these metrics—such as invoice-processing time, percent of on-time payments, and invoice exception rate—can provide a robust picture of the organization’s financial health. This view into fiscal health can help inform treasury’s cash management strategies in addition to liquidity risk projections and cash forecasts as high as the CFO level.
Final Thoughts
For much of its history as a separate function in the enterprise, AP has operated as little more than the place where supplier invoices go to be approved. Ardent Partners’ ePayables 2015 study, however, paints the changing picture that more enterprises are focused on driving strategic value from AP than ever before. This change in perspective can only benefit everyone in the long run, from the CFO all the way down to the line-of-business manager.
Check out these related articles for more:
The ePayables 2015: Higher Ground Report is Now Available
ePayables 2015: Reaching for “Higher Ground” in Accounts Payable
