The Future of Accounts Payable Goes Beyond Efficiency

As accounts payable departments move toward paperless processing, they’re becoming a more value-added business partner. Automated and data-driven processes are helping transform AP from a basic transaction center to a powerhouse of business intelligence.

Ardent Partners’ ePayables 2015: Higher Ground report gives a comprehensive look at the state of accounts payable today. The industry study finds that rather than focusing on simply achieving workflow efficiencies, progressive organizations are going to prioritize AP reporting and analytics in the years ahead. This technology-driven imperative will shift AP into a more strategic position. Consider these study highlights:

Goals for today’s AP organizations within the next two years:

• Automate more AP processes: 53%
• Improve collaboration and process linkage between AP and procurement: 37%
• Reduce operational costs on AP-related processes: 33%
• Transform AP into a more strategic and agile business function: 30%
• Improve the commercial card program: 17%

Specific ePayables priorities for 2015-2016 include:

• 40% Invoice processing: invoice approval and related workflow
• 22% Invoice receipts: how AP receives invoices and captures key information
• 13% B2B payments: how payments are scheduled and made

Technology is always a key driver of innovation and process improvement. In AP, technology boosts capabilities—making payments faster, for example, and enabling leaders to access transaction data for bigger-picture financial evaluation. It will ultimately lead to real-time decision-making and interconnectivity between business units. As a result, business partners will create win-win scenarios for stakeholders across the value chain.

The study revealed that the main obstacles faced by AP professionals are exceptions that can delay payment processing and create gaps in real-time data. A “high percentage of exceptions” tops the list of AP challenges (with 48%) in 2015, ahead of delay in receiving (or lack of) matching information (42%) and lack of visibility into invoice and payment data (34%). When asked what it will take to bring AP to the “next level” of performance, the largest share of respondents (56%) said they’d need to improve exception-handling and root cause analysis. This is followed with 53% by new or improved technology.

The move away from paper and adoption of technology solutions will likely reduce the administrative inefficiencies that tend to create exceptions. At the same time, it will catapult the AP function into the digital realm, where data is at the fingertips of leaders across the company. As such, information is shared between departments—and even suppliers—more easily and “crunched” to prove insights into, on a high level, the company’s overall financial health; more granularly, data analysis uncovers spend trends and patterns that can be used to improve supplier negotiations and can help reveal the value of early payment discounts and other AP cash-flow related opportunities.

Moving into the future, accounts payable leaders and their teams will be relied upon to support their organizations’ goals and objectives—and become true partners in achieving bottom-line success.