Editor’s Note: Over the next few weeks on Payables Place, we’re publishing some “best of” 2018 articles as we reflect on the year and prepare for the new year ahead.
In 2018, the role of the AP function in most businesses is incredibly clear: tightly-manage day-to-day processes (primarily invoices and payments) while providing value to the functional partners and the greater organization via specific insights and intelligence. Today, the typical AP team continues to work slowly, but surely, to alter the archaic perception of being merely “back office” in nature. In fact, over the past few years, a majority of AP groups have started to successfully leverage new strategies, approaches, and ePayables (or AP automation) solutions as a way to show that their impact can extend well-beyond their traditional bounds. For these groups, the future is now.
And, while leading AP teams have initiated a full transformation to become a strategic business partner instead of a nominally collaborative business function, the hard truth is that the current market landscape has created a series of business pressures that make it increasingly difficult for financial operations leaders and their teams to garner the resources and support needed to better realize the huge opportunities that sit ahead of them. As a result, AP departments (and the entire profession) must continue to wage a sometimes uphill battle for credibility, relevance, and investment. But these are battles that can be won and, therefore, must be fought.
For most AP teams, the path to victory is paved with efficient processing, the enablement of stronger supplier relationships and performance, and the intelligence provided to help AP’s functional partners in procurement and treasury make smarter spend and cash management decisions. As an industry and as a profession, AP’s future remains very bright. For AP departments to fully realize their future potential, it is incumbent upon their AP leaders to take action today.
AP Transformation: A Journey, Not a Destination
Once upon a time, automating time-consuming manual tasks was an end-goal for AP organizations. Today, many AP leaders now realize that to live happily ever after and be considered a strategic business process, automation is just the first chapter of a longer story. Only after AP processes have been automated and the function is in a position to focus on handling exceptions (and not handling every invoice), can it begin to move up the value chain and focus on the more strategic aspects of the operation, including data gathering, data analysis, and dissemination of the data/intelligence. Ardent Partners believes that AP’s ability to leverage its data to provide actionable information to key stakeholders is the “golden goose” the organization can use to impact enterprise operations and results. Of course, capturing this data without the use of automation tools is a fool’s errand.
And, despite the general pressure on businesses to modernize themselves and comprehensively digitize the entire enterprise, many AP departments have been largely overlooked when it comes to digitization investments. The simple fact that other business units and functions have been prioritized ahead of AP in the current technology movement means that AP will have to work hard and deliberately to argue its case for enterprise relevancy and new investment. At the same time, AP leaders must be keenly aware of the need to build an organizational foundation that is firm enough to support current business needs and objectives, but is also flexible and agile enough to develop the capacity to identify and support the future needs of the enterprise as they emerge.
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