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Your AP Department Collects Valuable Data. Are You Unlocking Its Full Potential?

All organizations today are focused on one thing: doing more with less.

Simply put, the strongest companies are interested in scaling without adding more people so they can process more transactions with the same amount of resources. Doing that requires making shrewd investments in automation that enables you to move faster, eliminate repetitive manual tasks, and get the information you need to make the best decisions.

In an effort to increase organizational productivity and boost profitability, more and more organizations are investing in their accounts payable (AP) departments. AP is moving from paper-centric processes that manually handle invoices to automated processes that resolve invoice exceptions, feed information to ERP, and generate real-time views into payments and cash. With these changes, AP evolves from a back-office function to a strategic hub of intelligence for the entire organization. In fact, a recent study from Ardent Partners found that 60 percent of organizations consider AP to be “very” or “exceptionally” valuable to their operations.

With AP automation, organizations can transform AP while increasing control over and visibility into the entire AP process, giving you the information you need to make the most impactful decisions possible — always.

With that in mind, here are three ways you can use AP automation technology to unlock the full value of the data that’s sitting in your AP department.

1. Optimizing Cash Flow

AP automation gives accounting teams complete control over their AP processes. As a result, teams get the information they need to make rapid decisions. Using that data, they can quickly take actions that enable them to achieve their goals with respect to cash flow and profitability.

With automation, you can make sure you’re paying suppliers fast enough to take advantage of every early payment discount automatically. At the same time, you can wait to pay other suppliers until the invoice is due to extend your cash flow.

Either way, you’re making your suppliers happy by ensuring they’re paid timely — and you’re optimizing more than just cashflow.

In fact, AP automation technology can eliminate invoice exceptions, the number one cost driver in AP, by leveraging machine learning and artificial intelligence. For example, if an invoice comes in without a purchase order line number on it, the technology can mine historical and other relevant data to predict the purchase order line number and eliminate potential invoice exceptions.

2. Creating a Direct Digital Connection with Suppliers

AP automation gives organizations a direct digital connection with their suppliers, meeting modern business expectations around real-time data and self-service.

On one hand, this gives all of your suppliers the peace of mind that comes with knowing when they can expect payment. Instead of calling or emailing your AP team, suppliers can simply view invoice and payment status in a portal. As an added bonus, your team is free to focus on other important areas of operations.

Proper automation makes it easy for suppliers to send invoices to you however they choose, which prevents disruption on their end and delivers error-free invoice data to you. There is no burden whatsoever on the supplier’s side. They send invoices just like they always have, and the technology takes care of the rest.

3. Understanding Trends in Your Payment Data

AP automation also enables organizations to become aware of trends they might not have otherwise known about. For example, you might look into your system and see that an invoice is on hold because the goods haven’t been received. You can then look into that issue and resolve it before it can become a downstream supply chain disruption.

When you’re able to see all of your data in one place, you can also uncover other kinds of payment trends in your own data. For example, in March 2020, companies likely noticed that businesses were struggling to make payments on time as the COVID-19 pandemic first made landfall. Using that information, they could predict that cash flow issues might be on the horizon and begin taking proactive steps to address them.

Or a retail company might analyze payment patterns over the last five years and see that they’re only up 15 percent during this year’s holiday season compared to 25 percent in previous years. Using that information, the company can make a guess about how it will finish off the year and adjust accordingly.

Through this lens, AP automation helps your AP department transform from number crunchers into strategic partners who make data-driven decisions to benefit the company’s financial well-being.

It’s Time to Put Your AP Data to Use!

Your AP department is collecting tons of valuable data every day. But without the right tools in place, it is impossible to unlock its full value.

By investing in powerful AP automation, your accounting function gets all the at-a-glance information it needs to reach its full potential while trusting proven technology to automate all the busywork away.

What’s not to like?

About the Author

Shan Haq is Vice President of Corporate Strategy and Development with Transcepta, a leading cloud-based Procure-To-Pay platform. Haq is responsible for shaping Transcepta’s strategy for new markets, products, and alliances. Through leadership roles in corporate strategy, marketing, and product management, Shan has successfully grown businesses within Microsoft, Deloitte Consulting, and Boeing Space and Technology. Transcepta, based in Aliso Viejo, Calif., is an intelligent Procure-To-Pay platform that enables Accounts Payable and Procurement teams to achieve 100% straight-through invoice processing across their supply chains, without scanning or OCR Imaging.

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