The Value of Accounts Payable
The value of accounts payable has always been high, but the perceived value has, unfortunately, not always reflected this. While there have been many struggles from the recent pandemic, one good effect has been the increased perceived value of accounts payable. According to a recent study by Ardent Partners, 67% of enterprises consider their AP department “very valuable” or “exceptionally valuable”.
But why did it take a pandemic for people to better appreciate the value of accounts payable? For decades, AP departments have been handling late invoices, invoices that don’t match POs, constant calls and emails from suppliers, internal complaints, and more while still getting invoices processed and paid as fast as their systems allow. With the introduction of accounts payable automation, processing times have been reduced and efficiencies increased, but AP departments were still often considered difficult to work with.
One major reason for the disparity in perceived value could be that accounts payable has traditionally been viewed as a place where money is lost. It’s not AP’s fault, their job is to pay the invoices, but it created a perception that accounts payable can’t bring money in. With the pandemic came a need in a lot of industries to temporarily or permanently alter contracts and payment strategies with suppliers. When accounts payable was able to do this and still stay on top of shifting invoices, more people realized that AP was more than just a payout machine within the company.
Additionally, the pandemic forced a lot of upper-management to realize that some higher form of automation was necessary for accounts payable to be able to work on invoices remotely. With greater automation naturally came the ability to process invoices faster, and more early-pay discounts becoming available to the company. This allowed more people to see that, with the right tools, accounts payable could actually be saving the company time, stress, and money.
While many have always known the value of accounts payable, we’re grateful that changes are being made and greater acknowledgement is being given to the work done by AP departments. If you would like to know about more changes going on in accounts payable, you can check out the full report on The State of Accounts Payable by Ardent Partners. If you have any questions how to get more value out of your AP department, reach out to us at iPayables, we’re happy to help.