A value driver is a factor that increases the worth of an asset, function, process, outcome, or business. Over the past few years, it has become clear to a majority of business leaders who think that AP is a value driver. In 2024, sixty-one percent of business leaders cite accounts payable as “very valuable” to “exceptionally valuable,” a finding that reinforces a long-held Ardent Partners concept of “AP as a hub of intelligence and efficiency.” This consistent view of AP indicates what lies ahead of it.
Here are a few things AP can start doing to maintain its momentum.
• Embrace forward-looking innovations like artificial intelligence (AI). The AP function can transcend its traditional limitations and elevate its role within the enterprise. Through AI-powered automation, processes can be streamlined, reducing manual errors and accelerating invoice processing times. This not only enhances efficiency but also allows for better utilization of the group’s resources, freeing up time for strategic decision-making.
• Develop more effective process-led capabilities that transform tactical execution into strategic value. For years, the typical AP function was mired in paper, resulting in huge inefficiencies and limited opportunities to do anything highly valuable in the eyes of their stakeholders. When paper dominates an AP department, inefficiency — and most likely ineptitude — are sure to follow. Frustration with paper has been a primary driver for placing more emphasis on the “front end” of the total AP process. The result has been that more AP leaders are transforming the initial program capabilities — invoice receipt and approval workflow. Paper out, efficiency in!
• Serve as a valuable conduit for more strategic activities like spend management and cash management. One key attribute of AP is that it serves a critical role in how other, more strategic, enterprise units can function. For example, procurement can benefit from the power of AP’s ability to close the procure-to-pay loop in a more efficient manner, while treasury (or the executive team) can use the day-to-day insights of what AP is doing and processing to understand and then impact the business’ financial health.
• Drive AI’s value by organizing and cleansing AP data so that it is usable. Accounts payable sits on a veritable goldmine of data that can trigger intelligence-led insights and improve decision-making and thereby, performance.
With a majority of executives now considering the unit to be strategic, or more valuable to the enterprise, opportunities abound for AP. More specifically, it is high time for AP leaders to push their functions forward more aggressively.
