Transforming AP: Collaboration Connects Accounts Payable to Strategic Business Processes
Many organizations function in a dis-jointed and uncoordinated manner and most functions work in silos, where there is no inter-communication or information sharing. This limits building of unified strategies that encompass the entire organization. This leads to restricted growth.
Synergy between AP, Finance and Procurement
Functions, when not given strategic importance, tend to get more stranded. Accounts Payable is one such function, which is viewed majorly as operational more than strategic. An Ardent Partners Study conducted in 2016, states that only 15% of the participants take AP to be an extremely vital function as opposed to 33% who find AP to be “not strategic”. The scenario has changed immensely over the years as AP processes are moving to automation and have started to adopt a collaborative approach with many core functions like finance and procurement, to provide them with crucial strategic inputs that’ll aid their cost saving efforts.
AP & Procurement
Both these functions are an indispensable part of the procurement cycle and hence are closely linked to one another Collaboration between these two departments will not only make the data sharing seamless but also ensure higher efficiencies throughout the supply chain process.
AP & Finance
The strategic capabilities that Accounts Payable as a function holds are undermined immensely. The data capabilities and insights AP holds can aid functions like Treasury, Audit, Compliance and Forecasting. A collaborative approach with Finance will facilitate maintenance of optimum levels of working capital, provide increased visibility & control across all transactions and help fasten AP recoveries. Most importantly, AP automation provides a single platform for all records and real time updates. This ensures that the most accurate data in the form of financial reporting is available to the CFO and Finance to plan their activities.
AP & Budget Holders
Since all the payments and expenses any department makes are dispatched through AP, collaboration within the department facilitates identification of the highest consumers as well as the business units with highest savings opportunities. This collaboration also aids smarter budget management, timely payments to the suppliers and faster response time to all supplier related queries, thereby improving the organization’s relationship with its Suppliers
Digital Transformation of AP
Digitization is the cornerstone of the AP evolution towards a more strategic role. However, it does not stop there. It keeps aiming higher with technologies like automated matching capabilities, smarter workflows and digital approvals to improve operational efficiency. With each step it moves closer towards a completely touch-less processing mechanism to make auditing easier and financial control flawless. But to tap into the true power of AP, an inter-departmental collaborative approach is vital.
As Accounts Payable becomes more automated, it’s capability to contribute to the strategic aspects of the organization will also increase immensely. A collaborative approach with the functions across an organization can help identify process improvement & cost-reduction opportunities with integrated data as well as promote inter-departmental transparency.
Digital Transformation of AP is a vital step to move towards an integrated organisation.
Read the whitepaper titled “Transforming AP: Collaboration Connects Accounts Payable to Strategic Business Processes” to know more about the benefits of AP’s Collaboration and the strategic benefits that are derived from this approach.
The Benefits gained from AP Automation are undeniable, however to convince the C-suite it is essential to understand their goals and objectives. The Paystream Report titled ” The C-Suite’s Guide To Accounts Payable Transformation” is a tool that will facilitate a smoother transition from Manual to Digital.
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