Winston Churchill once posited that “To improve is to change; to be perfect is to change often.” And even though the quotable politician’s words may be applied to a wealth of grandiose scenarios, they also neatly summarize the aspirations of many forward-thinking enterprises in the realm of Accounts Payable (AP).
As we highlighted in our previous post on the subject, an overwhelming number of AP departments still find themselves hamstrung by a flood of paper invoices and manual processes—diminishing their capacity to make the meaningful contribution to an organization that their expertise and insights merit.
Determined to break away from such outmoded ways of working, companies are increasingly acknowledging the need to bring greater automation to the AP workflow. Of course, a change in processes will also demand a change in practices, with 66% of respondents in a recent Ardent Partner’s study stating a belief that the skill set required within AP will have to evolve in the next two years.
Perhaps the most obvious transition that will come about is a necessity for expanded technological know-how. As manually inputting data gives way to software that automatically scans invoices, AP staff will have more time to delve into new technologies that provide greater operational forecasting for the entire organization or significantly streamline the payment process. On top of that, 50% of Best-in-Class companies say they invest time in educating suppliers on how to most seamlessly unite their electronic workflows—a duty that may naturally fall to AP staff in the future.
Beyond becoming more tech savvy, AP staffers are also predicted to play an increasingly pivotal role in overall company strategy. Ardent Partners’ poll found that 69% of businesses expected a stronger partnership between AP and Procurement in the next two years, while 57% anticipated AP having greater involvement in working capital optimization.
On the Procurement front, for example, AP’s overview of a supplier’s invoicing behavior can offer key learnings for Procurement to act on in the future. Closer relations between the two departments will also ensure Procurement is armed with the most up-to-date financial data as they negotiate the challenges of spend management. Another essential component of this bond between AP and Procurement will unquestionably be method of payment. All the increased transparency into liquidity and cash flow that this relationship encourages will be almost pointless. That is, if businesses remain bound to transaction systems that aren’t equally transparent and capable of adapting to the very high possibility that a payment may need to be split, combined, rescheduled, or altered in some way during the invoice cycle. Only by having the means to accommodate the complexity of B2B payments will the marriage of AP and Procurement ultimately bear the fruit businesses are banking on.
The other key area highlighted by the Ardent Partners’ study—working capital optimization—means AP and Treasury are also likely destined to enjoy a tighter bond. Naturally, the timely delivery of invoice data from AP will ensure Treasury is be better placed to make educated calls around working capital, provided, according to one article, “…that the AP team is able to offer up the type of transparent financial data that’s possible with a technologically updated invoice approval workflow.”
If change really is the only constant, it won’t be long until expectations around the developing role of AP come to pass on an irreversible scale. At the heart of this evolution lies the technology AP staff will depend on every day to perform their duties—technology that must ensure the steps from procurement to payment are as dynamic as they will necessarily become to fulfill their ever more essential role within the bigger picture of their business’s objectives.