B2B Payments

Will AP Rise To The Challenge As A Strategic Function Of The Enterprise?

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If you think of the rise of corporate America over the last century, the function of the accounts payable department probably doesn’t come to mind as one of the main players. But something has happened over the last few years, according to Coupa VP of Strategy and Product Marketing Donna Wilczek: Technology has enabled AP professionals to become strategic and massively important to the success of any corporation, large or small.

Why? In an age of disruption, innovation and near-constant change, accounts payable has become a way for businesses to retain control and strategy.

“At no time in history has disruption been so prevalent,” Wilczek said. “And I’m not talking about what Coupa‘s doing; I’m talking about what’s happening in the macro-economy.”

When one compares the economic landscape of the U.S. in the 1950s, for example, to today, only about 12 percent of Fortune 500 companies from the decade remain in 2016, the executive said to demonstrate her point.

“Disruption is happening faster than ever, and I think what’s happening with accounts payable is that AP organizations now see themselves as a way to deliver value for a business,” Wilczek continued. “They can become part of what their business needs to be to stay viable and competitive.”

Accounts payable has become more than just organizing and scheduling a payment. Today, it is able to manage key business partner relationships, cash flow and financial data, and AP technology provides a deeper level of visibility into these areas than ever before, said the VP.

Today, accounts payable is also rising to the challenge of speed, said Wilczek.

She said that, “without question,” the recent rollouts of new services from Coupa — including its invoice processing solution, InvoiceSmash, and a Big Data management and analytics offering — have all emphasized corporations’ need for speed.

InvoiceSmash, for example, was introduced this month with an emphasis on accelerating invoice processing times.

“Once you are able to speed up invoices, you now have more control,” the executive explained. “A business now has the ability to determine what it should do with the cash. Do we want to ask for a discount and pay the invoices early? Do we want to hold the cash? The speed gives you options.”

Wilczek added that the speed with which invoices are handled also holds a deeper role in the buyer-supplier relationship — a factor that, while perhaps less measurable, still provides strategic value to a corporation.

“A really important thing we do here is enable transactions to be faster between buyer and supplier. Why that’s so important is because, certainly, the faster transaction has enormous benefits on the supplier end,” she explained.

Wilczek cited statistics that show the vast majority of businesses in the U.S. operate with fewer than 500 employees; more than 85 percent are running with fewer than even 20 workers. They are mom-and-pop operations, she said, often “just trying to make it.”

Being able to pay them faster means securing a strategic business relationship without ignoring the “human element” of that transaction, Wilczek said.

Understanding the landscape of the supplier base, she continued, can also help a business reach a new demographic of vendors that were previously untapped.

“It’s relatively easy to get control and speed up your invoice processing with your largest suppliers,” she said, adding that many major vendor conglomerates have the resources to pre-negotiate payment terms and costs. But for the remaining 80 percent of the supplier base — those mom-and-pop firms — invoice processing speed is critical in being able to capture financial benefits.

When it comes to Big Data, Wilczek said speed of analysis and reporting is crucial for executives to gain the insight they need and make the correct decisions when necessary. And handling massive amounts of data to extend to other parts of the enterprise, she said, is a “natural part” of the accounts payable job.

The corporate world certainly is prioritizing speed, whether it be invoice processing, payments or any other aspect of an operation. In order to compete in today’s market, a business has to accelerate.

Already, however, the massive pressure to hit the gas is introducing anxieties about the safety and accuracy of these operations.

In the various markets in which faster payments initiatives are underway, for example, concerns are emerging that highlight the reduced window of opportunity that financial services firms have to identify and mitigate any cyberrisks, data breaches or errors within a transaction.

That risk of error extends to any other business operation, including invoice processing and data analytics, said Wilczek, who said that while speed and accuracy can struggle to coexist without the proper technological solutions within the AP department, they’re also not mutually exclusive.

“Nor should the bar be set that low for AP, frankly,” the executive stated.

Think about everyday banking, she said. While consumers and businesses demand speed, they would hardly forfeit accurate and safe financial services just because those services are faster than others.

The same should go for an enterprise looking to strengthen their accounts payable operations. After all, with AP now a strategic function of the corporation, the standards are set high and rising.

Wilczek emphasized the need for AP service providers to embrace their newfound, albeit taxing, role.

“I challenge AP organizations to set their bar high,” she said. “You must have speed, but you must also have accuracy.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out our April 2019 Unattended Retail Report. 

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