A recent study of accounts payable (AP) executives from around the world revealed a new focus on improving operations and analysis, technology, and collaboration to “achieve the next level of operational excellence,” in the AP department. The findings are from a study by researcher Ardent Partners titled ePayables 2015: Higher Ground.
In addition to finding that electronic payables (e-payables) adoption is gaining the most initial traction in AP improvements—especially in areas such as document imaging and scanning, automated routing and workflow approval, and automated data capture— the study revealed that the procurement department is an important link to achieving operational excellence in accounts payable.
The study, which was sponsored by purchase-to-pay and e-invoicing solutions provider Basware, identified three top activities to help move AP to the next level of performance:
- Improve exception-handling and root cause analysis (56%)
- Implement new or improved technologies (53%)
- Enhance connection with procurement (45%)
Indeed, collaboration with procurement and other departments figures high on AP executives’ to-do list.
“Since AP is a critical area for an organization and impacts many other departments, companies are focusing on ways to elevate that function and achieve high levels of excellence,” said Andrew Bartolini, chief research officer, Ardent Partners. “Invoices are often the ‘eyes’ to the financial soul of the business, since CFOs and other C-level executives can use AP data to gain insight into corporate financial health. The spend and supplier-specific data included in invoices can be leveraged to identify spend trends and patterns, support future supplier negotiations, and can determine how well-positioned a company is to take advantage of early-payment discounts.”
The study also found that companies’ plans for e-payable initiatives over the next two years include implementing purchase-to-pay solutions (51%), supplier portals (51%), e-invoicing solutions (49%), dynamic discounting (42%), and supply chain finance solutions (41%).
Other key findings include:
- The top priorities for 2015 are: improving AP reporting and analytics (40%), reducing processing costs (37%), improving collaboration with procurement (31%), improving collaboration with suppliers (30%), improving connectivity to suppliers (28%), and better linking purchase-to-pay processes and systems (27%).
- While collaboration with procurement is recognized as a key focus for operational excellence, 40% of AP departments have implemented moderately collaborative initiatives with Procurement, and only 22% have a strong link.
- The goals of AP organizations for the next two years include: automating more processes (53%), improving collaboration and process linkage between AP and procurement (37%), reducing operational costs on AP-related processes (33%), transforming AP into a more strategic and agile business function (30%), and improving the commercial card program (17%).
“We are committed to continuously taking the pulse of the industry to best meet the needs of our customers today and tomorrow, and Ardent Partners’ research into the state of e-payables helps us effectively do that,” said Robert Cohen, vice president, North America, Basware. “ePayables 2015: Higher Ground provides great insights into the technologies and best practices that are enabling AP organizations to effectively manage their cash and working capital as they strive for excellence in their AP operations.”