Redefining Accounts Payable: From Operational to Strategic

AP (accounts payable) teams are just doing admin work, right?

When attending the Basware Sales Academy recently, I was surprised to learn how the above question represents a common misperception, and how the importance of AP teams is often misunderstood and undervalued.

The role of AP teams goes far beyond “just” processing invoices and managing payments. They are at the very heart of every business, the unsung heroes working tirelessly behind the scenes to ensure the smooth flow of financial transactions and data accuracy.

The latter is particularly important as AP teams can generate high-quality datasets in near real-time that serve as the bedrock for informed decision-making across all departments. Whether it is budget allocations, vendor negotiations, or financial forecasting, the insights gleaned from a well-optimized AP process are indispensable. 

This is where we see a change in thinking starting to happen.

Instead of viewing AP as a standalone function within the purchase-to-pay (P2P) cycle, more and more businesses and partners agree on an "AP first" approach as being much more impactful. Optimizing the AP process can deliver greater impact with shorter time-to-value compared to the more conventional and highly complex approach of focusing on a full P2P solution.

By prioritizing AP efficiency, organizations can :

• streamline operations
• significantly reduce costs and capitalize on early payment discounts
• mitigate risks
• increase supplier satisfaction
• foster stronger vendor relationships and supplier satisfaction
• enhance cash flow management
• drive business growth and improve overall financial health.

This becomes even more relevant as governments all over the world increase regulations and issue e-invoicing mandates. Taking their invoicing processes 100% digital and continuously adapting to new legislation that can vary strongly from one country to another represent major changes for businesses. Well-defined AP processes can not only facilitate this change, but also provide crucial data and insights in a timely manner to ensure business leaders have much better visibility to make informed decisions.

With change comes opportunity. It is exciting to dispel the myth of accounts payable as mere administrative work and acknowledge its pivotal role in shaping organizational success. Businesses should recognize and celebrate AP teams for their invaluable contributions and embrace an "AP first" mindset to unlock greater efficiency and strategic value within our businesses. The true potential of accounts payable extends far beyond the confines of routine tasks; it is a catalyst for innovation and operational excellence across the entire organization.

Learn more in our recent report,“AP Metrics that Matter,” produced in collaboration with our friends at Ardent Partners.