Physical disruption and “work from home” mandates, furloughs and layoffs, downsizing and outright business closures. The uncertainty gripping global markets during the COVID-19 pandemic and the challenging business climate has a silver lining for Accounts Payable (AP) groups. It’s an opportunity to truly automate their workflow and drive tremendous value and help the greater enterprise navigate these tough times, according to the latest “State of ePayables 2020” report by research firm Ardent Partners.
We’ll explore the report’s key findings in two posts. Today’s installment will focus on how AP Automation can rise to the challenge, and next week we’ll look at the key strategies for successful AP Automation
“In 2020, the AP profession continues to gain momentum and impact business operations and results in an increasingly strategic way,” the 15th annual survey and analysis of industry trends concludes. The “renewed focus on liquidity and cash management is poised to pull AP into the limelight with an urgency never before seen.”
After interviewing more than 200 AP and finance leaders between March and May of this year, the authors conclude that the AP function continues to evolve from a back-office role to a more strategic hub of efficiency and intelligence for the rest of the company.
AP leaders who use smart strategies are not only addressing short-term enterprise needs like optimizing working capital and positively impacting cash positions. More importantly, they can also press forward on longer-term initiatives such as digital transformation and enabling more intelligent supplier relationship management. “They position themselves and their organizations to play an increasingly strategic role when the recovery inevitably begins,” according to Ardent.
The report lays out how end-to-end AP automation can:
- Ensure business continuity,
- Build resiliency
- Let organizations rise to the challenges of uncertain markets.
More than two thirds of respondents reported that AP groups have been impacted by the recent crisis while trying to ensure that their businesses could continue to operate.
As the threats of business disruption subside, AP departments should use the crisis as an opportunity to drive supplier enablement up and in turn drive their processing costs down. AP’s new agenda should be to automate and support the recovery, Ardent concludes, since that function is in a unique position to provide timely data and intelligence on what an organization spends, where and with whom. “AP can help sourcing teams make better decisions and help streamline the onboarding of what is potentially a large number of new suppliers.” And going digital has tangible benefits.
End-to-end AP Automation beats the average AP unit’s benchmarks across all categories:
- The cost to process a single invoice drops from $10.89 to $2.56.
- Processing time goes down from 10 days to 3.1 days.
- The invoice exception rate drops from 24.6% to 10.6%.
- The number of invoices that are processed “straight through” more than doubles, from 30.4% to 67.2%.
Yet most companies are not there yet, contrary to what they say. While 62% of those polled by Ardent said they already have AP Automation in place, the study found that a much lower percentage of companies use full automation across all three phases, from invoice receipt and approval workflow to payments. “Less than half of all AP departments have fully automated any area, a stunning revelation.” This piecemeal approach is a barrier to fully unlocking the benefits of scale and flexibility that true AP Automation offers: eInvoicing, ePayments and complete procure-to-pay automation.
Ardent’s take-away is clear: “Organizations that leverage technology to automate the AP process perform better and deliver greater value.” And the time to get started is now.
Curious to learn more about ePayables in 2020 and how AP is rising to the challenge? Watch our webinar presented by Yooz and Ardent:
The webinar was hosted by Bob Cohen, VP of Research & Marketing, Ardent Partners, and Cody Manning, VP of Sales, Yooz North America.
You can also download the entire report here: https://cloud.getyooz.com/report-the-state-of-epayables-2020