The global pandemic COVID-19 has caused widespread disruption, necessitating shifts and adaptations across various sectors. One such area that has experienced significant change is the Accounts Payable (AP) function in businesses. As organizations scrambled to adjust to remote work settings and changing market dynamics, AP operations found themselves at the heart of a digital revolution, according to Ardent Partners' Accounts Payable Metrics that Matter in 2023 research.
The Advent of AP Automation
Pre-COVID, the adoption of automation in AP operations was gradually picking up speed. However, the pandemic has considerably accelerated this trend, turning it from a luxury to an essential requirement for business survival. Today, invoice workflow automation is seen in 64% of organizations, followed by supplier portals at 58% and electronic invoicing solutions at 57%. These tools are reshaping the AP landscape, leading to increased efficiency, reduced errors, and improved supplier relationships.
Challenges Faced in AP Operations
While the benefits of automation are significant, the shift has not been without its challenges. High invoice processing costs, extended cycle times, and a high number of invoice exceptions persist as considerable issues. Moreover, the reliance on manual processes has been an Achilles heel for many, causing errors and inefficiencies that diminish the overall effectiveness of AP operations.
Transforming Challenges into Opportunities
Despite these challenges, the pandemic has offered an opportunity to rethink and reevaluate AP operations. The focus has shifted to cost-effectiveness, automation, integration capabilities, and the capacity to handle increasing volumes and complexities.
In the face of adversity, AP has shown a resilient side, not only maintaining its function but becoming a strategic powerhouse within the organization. From being a back-office function, AP is now seen as a driver of insightful data that aids financial decision-making and improves supplier relationships.
Embracing New Skills and Roles
To fulfill this strategic role, AP professionals have had to develop new skills rapidly. This involves a clear understanding of their organizations, leading fraud detection and mitigation efforts, expanding AP reporting and analysis, and adopting a customer service mindset.
The AP function has moved beyond transaction processing to become a strategic enabler of business objectives. This evolution has required AP managers and leaders to continuously evaluate and develop their team's skills and competencies, ensuring their continued relevance and value in the transformed business landscape.
The Future of AP in a Post-Pandemic World
As organizations look beyond the pandemic, the focus is on the future of AP operations. The future entails an increased emphasis on automation across the entire ePayables Framework, more collaboration with key stakeholders, and potentially a single P2P function.
With a renewed focus on AP functions, organizations that master AP operations have a window of opportunity to deliver significant performance gains. Amid market uncertainty and additional financial pressures, AP mastery – starting with automation and building upon broad-based proficiency – offers a pathway to high value and competitive advantage.
While the COVID-19 pandemic has undeniably caused disruption, it has also served as a catalyst for change, especially in the AP sector. The necessity to adapt and evolve has brought the AP function into sharper focus, transforming it from a purely operational role to a strategic one. As the world moves towards recovery, the organizations that continue to invest in AP operations will be the ones that thrive in the new normal.