For accounts payable professionals who take pride in their work and believe in elevating the role of their team and positioning themselves as more than just that of a ‘cost center,” surveys of executive views and perceptions suggest how important it is to look at their department and its achievements through the lens of a company executive and consider the bigger picture.
AP’s performance is often measured according to operational costs and output, which makes sense when you’re managing the day to day, focusing on keeping ahead of the demand curve and staying within budget. But when it comes to accounts payable, those are table stakes. To really close the perception gap and achieve a better understanding throughout the organization of the role of AP, managers need to tie their performance to the company’s strategy and business goals.
If that sounds like a stretch for your role, your department or your own vision, read on.
While AP managers generally how hard their teams work, how dedicated and detail oriented they are, and support them to make them more effective and make the most of their talents, all too often, investments in automating processes like vendor payments isn’t a top priority. Focusing on the costs of processing an invoice may seem like a key point from an AP manager’s perspective. After all, who doesn’t want to save money?
But it has to be examined from a broader context.
According to research from Ardent Partners, a majority of surveyed executives perceived AP as a tactical function (translation: necessary evil). Among those that responded, 33% said they regarded AP as adding “some” value, collaborating on occasion with other departments and functions. A minority (15%) saw them as particularly valuable contributors.
Within that context, most executives valued workers performing AP tasks. Over half praised their efficiency and accuracy (20.4%) or valued their ability to complete their tasks and get things done (29.6%).
While AP workers are being valued for their work ethic and diligence, it appears that the work they actually do is perceived as being of lower value. That’s because executives don’t always draw a line connecting accounts payable operations to the strategic goals of the company. And AP managers often lack the ability to communicate and translate their team’s hard work into metrics and KPIs that are meaningful valued by the C suite. But is doesn’t have to be that way.
While few execs see the strategic value of AP, they DO acknowledge that the potential is there. And a majority suggest that they know how to tap into that potential. Over half (58%) see intelligent process automation or other technology solutions as critical for accounts payable to elevate its role and become a more strategic contributor.
Intelligent process automation can boost efficiency gains and cost savings for AP departments—the typical metrics for measuring ROI of the investment. BUT, from an exec perspective, better visibility to key financial performance indicators like cash flow and making a positive impact on cash management (usually the domain of treasury) significantly boosts the perceived value and contribution of AP.
Intelligent process automation, when applied to large volumes and a high velocity of vendor invoices, can lead to more efficient capture of data that improves visibility to g/l accruals and can promote better cash management. Rather than focusing on how quickly and efficiently AP can pay vendors, the focus should be on how AP can improve visibility to g/l accruals and strategically balance cash flow and early payment discounts to optimize costs savings and cash management.
That’s how AP managers can shift perceptions, and get the credit and praise for the hard work their team does every day.
To discover how IPA can make the work life of your AP team more fulfilling, deliver results your exec team will appreciate, and contribute to the success of your organization, contact your Artsyl Technologies today.