In this environment of constant flux and extreme competition, organizations should leverage any advantage available to them in terms of strategy, cost or time to stay ahead of the curve. Accounts Payable as a function keeps track of all invoices, payments and spend and hence is the biggest opportunity for cost saving. Not only that, the function is capable of providing the company with actionable data for strategy formulation. But to successfully establish its identity as a strategic contributor, we propose four pillars that support and balance AP’s contributions to the strategic objective.
Let’s take a look at what are these 4 pillars that a strong AP department rests on:
- Supplier Master Data Management: As per the 2017 Zycus eInvoicing Report card, 6 out of10 companies have the responsibility of maintaining and updating supplier records. This entire process of gathering, maintaining and updating supplier data is extremely tedious and error prone. According to a Gartner research conducted in 2013, AP automation saves $850 per supplier per year in data management. Since it offers an easy self-service portal to the suppliers, they can enter and update every bit of information themselves without the AP department having to engage in the process. It maintains accurate and de-duplicated records which can aid strategic decisions.
- Electronic Invoicing: An organization that uses eInvoicing ends up cutting their invoice processing time short and increasing saving. The task that consumes major portion of AP department’s time is tending to supplier calls to know their payment status. An eInvoicing portal provides suppliers with end-to-end visibility into data, facilitates payment tracking and acts as an open communication medium, thereby relieving the AP department from frequent supplier calls. It also gives the supplier visibility into the invoice cycle and enables him to select from the various invoice formats available.
- Touchless Processing: According to the PayStream Invoice Workflow Automation Report, most organizations spend 1-3hours per week in handling invoice processing issues like duplicate invoices, manual errors, frequent & multiple supplier calls etc. These issues cost AP departments their time and money. Touchless Processing can help in streamlining end-to-end invoice processes by eliminating the need for manual matching, automating exception handling and providing visibility into the entire invoicing process, thereby enabling AP to capture more savings and improve liquidity.
- Dynamic Discounting: The Dynamic discounting tool ensures organizations are able to extract maximum savings out of the discounting opportunities available so they can optimize liquidity and maintain cash-flow. It also helps with intuitive and real-time metrics to track organizational savings goals.
Irrespective of your AP department’s standing in the organization now, the future will see AP gaining more strategic importance. To maximize AP’s ability to provide valuable strategic inputs, automation is indispensable. The four pillars mentioned above will help you build a staunch foundation for an AP department with minimal manual intervention. To know more about the four staunch pillars that are imperative for an efficient accounts payable department read our report titled “4 Pillars To Accounts Payable Automation”
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