Leading procurement offices understand that transforming Accounts Payable (AP) from back-office workflow function to a more strategic capability means throwing out the old playbook and pushing the AP envelope to support better business outcomes – which includes understanding individual supplier and overall supply chain performance as well as improving supplier relationships and working capital.
The key is AP automation which streamlines workflow and reduces errors and risk exposure, enabling procurement organizations to focus more on strategic initiatives.
Here are three key tips organizations should consider as they begin the AP automation journey:
Eliminate risks – AP automation eliminates the old manual, paper-based AP processes which are error-prone, time-consuming and ultimately lead to increased risk exposure. By ditching paper and instead digitizing payments and enabling electronic communication with vendors, AP automation helps avoid risk and allows the team to focus on more strategic activities such as dynamic discounting.
Understand the data – There are mounds of data, and a top priority should be to establish the accurate entry and maintenance of supplier data through a secure supplier network. Actively monitoring the data enables procurement to both secure additional savings and also understand supplier performance, ensuring supply chains operate as efficiently as possible.
Uncover innovation through AP – Being strategic with AP processes can improve supplier relationships and increase working capital, with the latter helping to push innovation. AP automation systems alert the procurement and AP teams to the potential for early payment discounts, among other opportunities. By identifying working capital, companies can look to implement new strategic initiatives.