Accounts Payable, here today, so what of tomorrow?
We all love AP!
They pay the bills and keep our contacts happy whilst the business ticks over.
We also know that software is eating the world and when it comes to automation,
AP is never far from the agenda in planning sessions.
AP in its
current state is a highly structured process driven function that receives
invoices, processes them for payment and pays them. There are some accounting
and audit add-ons but the former in the essence of AP today. There is a clear
case for automation of AP with current ERP and character recognition technology
but like so many things, there is also an opportunity cost to investing large
amounts of money into a project that may gain productivity but will loose
headcount along with its associated costs, expertise and functional knowledge.
You will always find when a person compared to a computer watches closely, they
don’t retain as much information, but they do take on meaningful insights once
the right person is in the right position.
The
organisational view from AP yields an ability to see along the procure to pay
process chain to the supplier on-boarding process along with understanding the
supplier business including building subject matter expertise on the supplier
portfolio. This along with an incrementally deeper understanding of how
financial resources are being used by the company creates value and an
opportunity cost if overlooked. This to me is as important as the ability to
pay a bill on time, so why does it not factor into more strategic decision
making discussions on AP? I think the answer lies in the organisational
positioning of AP, how it is led and perceived in the social hierarchy of the
organisation. This matters when making strategic decisions on what you are loosing
to automate AP and what ‘picture’ you are carrying into the automation project.
So, what is the
biggest complaint management are having about AP? Productivity, Productivity,
Productivity!!! The traditional viewpoint is that AP is a cost centre essential
for doing business but is incapable of adding value to what is currently
available. I think if this is true, then the potential of AP is not being
fulfilled and any software solution will be just as lacking in its outcome.
Software
Projects that start fully informed have a greater chance of finishing in
success. Omission in formal meetings on AP’s contributions by managers is truly
damaging to a project’s success trajectory and often avoidable if the wider
team takes the time to understand what AP contributes, what it can contribute
and what value creation automation will bring to the business?? Will AP be a
foundation for a new approach to business intelligence given their subject
matter expertise on suppliers, the procure to pay process and analysis of
costs? Will it create value and if so, in what way? If these questions are answered in a
meaningful manner, then the company will see outside of the daily contributions
of AP and understand what could add value from a wider company perspective through
the professionals in AP as much as the processes therein.
Software will
one day eat your AP department by the vary nature of what AP is credited with
doing for the company today. However, if AP’s potential in things like query
management and process controls along with supplier development support and
analysis was developed in partnership with the procurement and sourcing
departments, then a more integrated, closer knit procure to pay process chain
would be delivering more value in how business is done, what business gets done
and what value is created by the human element of the process chain in a
futuristic AP as much as the automated processes therein.
Sources/Credits:
Pics:
Credits:
No comments:
Post a Comment