AP and Treasury: Partnering for Success

How Accounts Payable and Treasury Can Make Better Teammates

When it comes to various roles within finance, all too often the level of collaboration is far less than it could, or should be, to deliver optimal results. When it comes to AP and treasury, often both groups remain focused on their own roles and responsibilities, with minimal collaboration.

While both AP and treasury manage and maintain control over cash within an organization, surprisingly, these two groups often work in siloes. All too often, that kind of situation is the rule rather than the exception.

But today, technology and intelligent process automation present an opportunity to break down those walls, to create better process transparency and more timely access to data that can benefit both groups. Intelligent process automation delivers greater data visibility to better manage back office financial processes – but equally important, it creates opportunities for treasury and finance to refocus their efforts on planning, budgeting, process workflow optimization and collaboration.

When applied to accounts payable, intelligent automation can create broader and deeper opportunities for cross-departmental collaboration centered around cash optimization and risk mitigation.

Creating a Shared Vision

Treasury professionals pride themselves on being very analytical. They prioritize maximizing returns and exposing/mitigating risks. As a result, they often have greater visibility to the executive team members than their more operationally-focused counterparts in finance, which can potentially lead to cultural conflict with other members of the finance team.

Often, manual AP processes force departments to spend the bulk of their time on tasks like keying in data, printing checks and stuffing envelopes, in spite of their inherent inefficiency and waste. Collecting vendor payment information over the phone (rather than by automatically cross-checking system data) and handling exceptions/errors are a large part of the day to day activity. No wonder, in those environments, that treasury is perceived as adding more value-add than accounts payable. But it doesn’t have to be that way.

Acounts Payable team members proactively collaborate with treasury when automation takes care of the repeatable, predictable, routine work. Document handling, sorting and scanning, and data entry and approval workflows can all be handled via automation. That allows AP to spend more time working collaboratively to optimize cash flow. As a result, early payment discounts, avoidance of late fees and cash flow become the focus, instead of churning out payments to keep up with demand.

Creating a Culture of Collaboration

When AP focuses on output and works to get payments out quickly, they’re missing out on an opportunity to contribute to broader financial goals. Rather than focusing on speed, they have an opportunity to focus on the financial health of the organization, working with treasury to optimize cash flow while lowering costs in a way that makes sense for the business.

Treasury may want AP to process payments in a way that maximizes cash flow and takes advantage of accumulated positive interest – or to minimize interest payments on credit lines.

Working together, both branches of finance can help ensure that the appropriate payments go out at a time that makes the most business sense. In this kind of collaborative environment, the roles and reputations of both groups are elevated, and everyone wins.

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