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.)
3 Important Accounts Payable Goals for the Next Two Years
The accounts payable function operates in a unique niche within the enterprise. All invoices flow through AP, and all those invoices must be paid, which means that AP has the potential to be a significant source of insights and intelligence for many enterprises. This is if, and only if, the finance professionals on the accounts payable team are forward-looking enough to pay attention to trends and techniques that can push the function to the next level of performance. This is especially critical as AP navigates new, more strategically valuable territory in an ever-growing number of enterprises.
In order to effectively inhabit this new value-added place within the enterprise, AP must change how the invoice approval process operates as well as how well it collaborates with internal and external stakeholders. This cannot be done without well-defined, concrete goals and objectives for AP to aim for in the months and years ahead. As an example, three of the most important goals for AP over the next 24 months are:
- Automate more AP processes (53%): Technology is a key differentiator between efficient and inefficient accounts payable workflows. An effective AP automation installation can help create scalable, repeatable processes that are cost efficient and can provide detailed intelligence; a majority of Ardent’s ePayables 2015 survey respondents, in fact, noted that increasing the level of AP automation in their organization is the top goal for the next two years. This is understandable, especially because high levels of automation in AP is a key marker of a high-performing accounts payable function.
- Improve collaboration and process linkage between AP and procurement (37%): Collaboration between internal departments—and especially between AP and procurement—can offer a more robust view into enterprise data across the entire procure-to-pay (P2P) workflow. A linked process is an efficient one, and with AP and procurement sharing data back and forth the two teams can gain insight into important details they might not otherwise be privy to. This information, such as contract data, supplier invoice performance, and more can help push both AP and procurement into higher levels of performance when leveraged properly.
- Reduce operational costs on AP-related processes (33%): Cost reduction is always a goal for the accounts payable team, as it well should be. Even a slight reduction in processing costs when it comes to invoice approvals can make a significant difference to the bottom line. Best-in-Class AP teams in the ePayables 2015 research study have a per-invoice processing cost of $2.94, while each invoice costs all other organizations $15.96 to process. A $13.02 savings may not seem like much on its face, but save $13.02 per invoice on 10,000 invoices per month and the AP team has suddenly saved $130,000—not a paltry sum by any stretch.
Final Thoughts
Forward-thinking accounts payable teams are constantly looking toward the “next step” required to push the AP department to a higher level of performance. This is an important attitude to have, especially because the business world is only becoming more competitive. Reaching some key goals, such as adding more automation into the AP workflow and reducing costs, can help accounts payable teams to stay competitive and showcase their true strategic value to the enterprise. That way, everyone wins.
Check out these related articles for more:
ePayables 2015: How Improved Exception Handling Can Drive AP Performance
ePayables 2015: AP’s Top 3 Priorities in 2015
ePayables 2015: Moving From the Tactical to the Strategic
ePayables 2015: Reaching for “Higher Ground” in Accounts Payable
The ePayables 2015: Higher Ground Report is Now Available
