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Top 3 Takeaways: Prepare AP for the Digital Transformation

Editor’s Note: This blog post summarizes the key messages covered during the premiere Untapped webinar, Prepare AP for the Age of Digital Transformation, hosted by Medius in September 2018. Watch the on-demand webinar here.

In prior decades, the day-to-day life of the accounts payable team was usually hectic and stressful. Too often AP found itself reacting to inbound invoices and demands from various parts of the business, all while navigating a balancing act of a manual and inefficient process. In many offices across the country, these conditions are still very real for AP, but the wave of digital transformation has its target set on accounts payable, giving a new sense of urgency for finance teams to adapt to a more modern, automated way of running AP.

In our recent webinar, I was joined by a panel of industry experts to discuss best practices and smart strategies around AP automation in this increasingly digital era. From the wealth of knowledge shared by the panel, three distinct key takeaways became apparent

1. The perception of AP needs to be radically changed

AP carries the perception of simply being invoice processors, reacting to debt and bills as they appear. This is a systemic misconception that leads to the AP staff feeling undervalued and unappreciated. It also neglects the true value for the rest of the business that lies within AP. AP managers  need to correct this for the business by thinking like the C-suite; like a CEO or a CFO would. Why should a CFO want to invest in AP?

If you think of AP like a standalone business, you’ll start to understand the best way to communicate AP’s true value. What does AP produce, its “product” so to speak? And how does it get to the end product? What is the length of time it takes to complete the cycle time? Once you know these statistics, you can begin to highlight the areas for improvement to reduce the cycle time and therefore improve profit.

What may be even more critical than shifting the view of AP from other areas of business, is to change AP’s own perception of itself. In order to shift the viewpoint of the AP team, management needs to completely get rid of the old way of thinking and implement a brand new mission for the team. AP needs to focus on managing the company’s cash, not its debt, and be 100% concentrated on the process, not the invoices.

2. Embrace the full benefits of technology

When any business embarks on a business project to bring in automation, it likely kickstarts a company-wide transition toward improving efficiency in underperforming areas, even in departments where automation is not being implemented. One of the under-promoted benefits of an automation project is the tendency for an implementation to highlight process bottlenecks that spill over into other areas of the business, making it clear what needs to improve to reach high levels of efficiency. After go-live, automation makes it possible for management to optimize the supplier pool, eliminate overspending and duplicate payments, and avoid significant losses that undermine the bottom line.

Automation also elevates the importance of having the AP staff involved in strategic, valuable work for the business. AP is lifted to a new position of worth and appreciation in the company. No longer is AP backlogged with paper and inefficient processes; they have the tools and the time to take on more strategic roles, providing valuable data to the executive team and working with the new technology to drive continued benefits for the entire business.

3. Look for a partner in your prospective vendor search

In order to secure immediate and sustainable value, it’s important to move both quickly and intelligently, which requires a true partnership with your selected vendor. Look for a vendor that can provide best practices with AP-specific experience. You’ll also want to select an automation solution that can connect seamlessly with the existing ERP environment, something your vendor needs to be up front about and willing to share real project expectations on. A lengthy and complex deployment will not only delay the benefits of automation, but it could also end up costing the business more money and causing further detriment to the AP process and supplier relationships. 

Companies across the globe are coming to terms with the fact that automation is here to stay, and the benefits of embarking on a journey of digital transformation for AP are too numerous to ignore any longer. Check out the full webinar recording to hear the full conversation with the expert panel and get more actionable tactics on how to kick off your own digital transformation of AP.

Marc Bandini

Marc Bandini

President, Americas

marc.bandini@medius-group.com
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