AP Moves Beyond Automation

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Corporate treasurers are no longer number-pushers and bookkeepers. They are strategic players of a company, and that means the role of the accounts payable team is not only changing, it’s becoming more valuable to a business as a whole.

Two experts in this area of AP’s shifting responsibilities, Ardent Partners Chief Research Officer Andrew Bartolini and SAP Ariba Senior Director of Marketing Drew Hofler, recently explored the topic for the Interarbor Solutions BriefingsDirect Enterprise IT Podcast, a transcript of which was published this week.

Both experts agreed that in 2016, the AP department is standing on a precipice of change.

“What we’ve been seeing happening over the last year or so, and what will accelerate in 2016, is that AP begins to move more from just a cost saving and efficiency focus to value creation,” said Hofler. “And this is where they sit in the hub of one of the three critical elements of working capital — inventory, receivables and payables — and AP sits squarely on that last one.”

The SAP Ariba executive added that evolutions in accounts payables are going to go far beyond simply automating tasks. It’s going to move towards cost reduction and be used to improve overall cash flow.

Bartolini echoed this sentiment of change.

“We talked about the evolution of AP, moving from strictly back office siloed department to an increasing point of collaboration with procurement at the purchase-to-pay process, with treasury, from a cash management perspective,” he explained. “Now, we see it starting to move and becoming a true intelligence hub, and that’s where we’ve seen some momentum.”

“There’s a lot of wind in the sails for AP, really pushing that forward in 2016 and beyond,” added the Ardent Partners executive.

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Breaking down siloes, the AP professionals said, involves collaboration within the organization and its functions, as well as collaboration between buy-side organizations and their suppliers.

Developing technology has already begun to focus on the demand for internal connectivity, Bartolini said.

“Visibility at the core starts with automation tools that automate processes,” he said. “When you have an eProcurement and an ePayables solution connecting, you begin to have greater visibility within the enterprise for the entirety of the relationship and the entirety of the transaction.”

Where innovators need to focus now is on the connectivity between buyers and suppliers, Bartolini added. According to Hofler, data can be a key piece of the collaboration puzzle, and business networks will be the focal point where that data can be aggregated, analyzed and used intelligently.

“Having that centralized network hub where everybody can connect at the point of the process that they need really helps drive or enable the movement towards shared service and centralized AP procurement,” Hofler said.

Both executives agreed that removing paper from the procure-to-pay process is a major step towards taking advantage of the AP data that’s available.

“Companies are going to realize that just transforming a paper source document into an electronic form has had value in the past, but its value is quickly running out, and they need to move toward true electronic,” Hofler continued.

[bctt tweet=”‘Transforming paper docs to electronic had value in the past, but it’s quickly running out.'”]

As the accounts payable technology available to professionals today — data capture, eInvoicing, electronic business portals — begins to evolve, the AP department will likely continue down the path that it’s on today: becoming a more strategic unit of the company.

“Things are happening at a much faster clip and in tighter time frames. This has created a much greater reliance upon your suppliers and upon your supply chain,” said Bartolini. “And so, having visibility across the P2P process, across the source-to-settle process, and having much tighter relationships with your strategic suppliers ultimately positions the organization to become much more agile and much more competitive. And that’s the value dividend that’s created from a more streamlined P2P process.”