Why You Need a Mission and Vision for AP

In an unautomated, chaotic business model, the accounts payable department can often be an afterthought. AP management receives little to no funding for improvements and yet is often tasked with cutting costs, which usually translates to reducing headcount. The paradox here is that reducing headcount may be a temporary way to cut costs, but it doesn’t have long-lasting positive effects; quite the opposite, in fact. The real way to achieve actual improvements is through changing how AP is viewed in the organization as well as within the accounting department. A good starting point is to think of the AP department as a standalone business that needs a vision and mission.

How to establish a vision and mission for AP

The root of establishing a vision and mission for AP needs to come from the top down. AP leaders have a responsibility of protecting the company’s cash and providing timely and accurate financial data to the financial statements. Those are the first and foremost responsibilities of AP leadership, and if that isn’t what’s happening, should be the top-line message to communicate to the company’s financial leaders and CFO. These are extremely valuable to their responsibilities to guide the company’s finances.

To earn the investment from the company’s financial stakeholders, the AP leadership needs to put themselves in a CFO’s shoes and think, “why would a CFO invest in AP?” Afterall, the end goal here is to achieve the responsibilities of protecting the company’s cash and providing accurate data in a timely fashion, which ultimately requires an investment for automating the AP process. The AP leader needs to account for every part of their “business,” marking what their value to the organization is and how they provide that value. How much time does it take for AP to deliver their “goods” to the business? What are the bottlenecks or cracks in the system that slow down the process?

Focus on AP’s value to the business

With that frame of mind in place, it’s important to establish a mission for the AP team. Not focusing on the debt, but focusing on the cash. Centering efforts for improvements on the process, not on headcount or invoices. The mission redirects the AP team from focusing on the reactive way of the past, to focusing on the end to end process and AP’s value to the business. That mission may look something like the following:

“To build a cohesive relationship with procurement and suppliers to develop a compliant purchasing and payment strategy for goods and services to meet the needs of the organization while making a positive impact to the bottom line and protecting the cash, supporting cash management and reporting accurate, timely data to the financial statements.”

From there, it’s important to think about what the CFO’s agenda includes, and that revolves around profit. It likely is the driving force behind the initial push to reduce AP’s headcount. But that is a common mistake. Reducing headcount is a one-time benefit that pales in comparison to the profits obtained through changing AP’s mission. Tangible, repetitive benefits like discount opportunities, spend management and budget control, p-card rebates, cost avoidance on penalties and fines. And that’s just a partial list, there are countless other benefits that come from an efficient AP process.

Leverage automation to support AP’s vision

The road to success begins with changing AP’s perception, both internally in the team and externally to other areas of business, with the mission you put in place. By bolstering your AP’s value to the organization and making it clear that their role is instrumental to the bottom line, you can move forward to create a positive ROI for investing in AP automation and making the AP process efficient and opening up control and visibility into the company’s cash flow.

To learn more about establishing AP’s mission and vision, and to hear from a company who made these changes and implemented AP automation as a result, register for our upcoming webinar, “How AP Automation Paves the Way for Digital Transformation.”

Meredith Grace

AP Automation Editorial Team

meredith.grace@medius-group.com