Accounts Payable – From Cost Center to Profit Center
Friday, 4 Dec 2015
My colleague Andrew discussed the changing role of Accounts Payable in his blog post a while back. He said that in his role as Business Consultant he discusses extensively with different organization what the role of Accounts Payable today is and what it should be in the future.
Product Marketing Manager, Sales Enablement
The Changing role
The same topic was discussed in our recently published commissioned study by Forrester Consulting on behalf of Basware titled, “The Total Economic Impact of Basware Purchase-to-Pay (P2P) Software Solution”. The interviewed organizations reported up to 50% efficiency gains in the accounts payable department. Overall, the interviewees noted that the role of AP professionals had changed; instead of managing a manual invoice handling process, including tasks such as scanning, data entry, and collecting approvals, they now manage exceptions, analyze data and optimize the process. At the time of the interview, one of the interviewed organizations had achieved 89 % e-invoicing with a 54 % matching rate.
A development manager at a large property management company noted:
“Our invoice handling process has been streamlined. Invoices can now be matched automatically to a purchase order or a contract, and we have uniform working practices. Our AP personnel has become more productive, and over the years their number has decreased. We actually think that the role of the AP professional has changed a lot, because before, they had to do basic invoice data handling. But nowadays, it’s more like expert services such as analyzing the data and handling deviations in the process.”
Additionally, due to a faster and more transparent invoice handling process, the number of supplier inquiries have decreased, saving time and money.
Tools that support the new role
So, what are then the tasks AP professionals should do to reduce costs and increase revenue, and what tools are available to help them? Another colleague of mine blogged about Basware Analytics a couple of weeks ago, introducing financial dashboards that monitor the overall P2P performance and help AP professionals proactively manage exceptions. By efficiently handling deviations in the AP process, proactively searching for optimized payment options and providing procurement teams with information to increase purchase or contract based matching rates, AP departments can truly become a revenue generating team!
To learn more about what kind of cost savings and efficiency gains companies are able to achieve with optimizing their Purchase-to-Pay process, download the study here »