In today’s competitive marketplace organizations who neglect to invest in and enable their Accounts Payable function are doing more damage than they likely realize. When Accounts Payable processes are not up to par, the impacts on the department itself are obvious. AP processors become bogged down with manual tasks and all sorts of preventable business waste, perpetually limiting them to a tactical role. But there are additional impacts outside of the AP department. When the AP department is not up to snuff this means suppliers are not going to be paid on time. This is damaging to supplier relationships and makes life difficult for the Procurement department. Suppliers have no incentive to offer better pricing and service terms and will be less willing to offer additional value-added services they would provide to more valued customers. Outside of these targeted negative effects, the business’s financial accuracy and bottom line take a big hit. When considering how to solve these problems, businesses need to think in terms of a transformation.

As you look for the best approach to transform your Accounts Payable operations, the good news is there are options. The three areas to focus on that will make the largest and most immediate impact are: automation, policy and process, and managed services. Best in class organizations typically seek the help of industry experts to determine the right balance of each. In the end, whatever approach is taken, investment in any of these three areas will result in a more strategic, empowered, and thus happy Accounts Payable department. Now lets take a closer look at each of these three options.


Accounts Payable automation utilizes technology to optimize the flow of your business’s invoices. Doing so eliminates highly complex and manual paper-based processes and replaces them with digitally streamlined and simple processes. Eliminating these manual paper-based processes will dramatically increase the productivity of your Accounts Payable department. Better yet, by removing these burdensome non-value adding tasks from AP’s desk, they can better focus their time on more strategic value adding tasks and projects. This will improve the morale of your Accounts Payable department, as well as their reputation across the rest of the organization. The bottom line is automation can enable your organization to accelerate invoice processing cycle times by up to 70% and reduce average invoice processing costs by 80%. These are results that matter.

Policy and Process

Best-in-class organizations establish and strictly manage detailed and clear policies for invoice handling: from receipt, through approval, and payment. These policies must be formalized, comprehensive, consistently applied, and easy to navigate to encourage compliance. Additionally, Accounts Payable processes need to be aligned with your organizational goals for the department. Processes should also be well documented and monitored to gage performance and monitor business health. To assess policy and processes, it is critical to establish and continuously track metrics and KPIs. Accounts Payable KPIs that should be tracked by all organizations include: cost per invoice, payment cycle time, payment accuracy percentage, days payable outstanding, and on-time payment percentage. Additional KPIs you may want to consider depending upon your strategic priorities include: percentage of early payment discounts captured, percentage of supplier invoices accurately billed, or average cost per supplier dispute. Whatever the strategic goals for your Accounts Payable department may be, it is critical to review your policy and processes on a regular basis to ensure they are aligned with those goals and being adhered to.

Outsourcing and Managed Services Provider

If you feel as though your Accounts Payable organization is immature but are not quite sure where to focus to solve the issues, enlisting the help of a 3rd party Accounts Payable solutions provider is likely your best bet. Gaining perspective from a solutions expert will help your organization understand current state maturity in terms of analytical capabilities, staff, policy and process, and technology to determine the appropriate balance and necessary steps to implement long term effective solutions. In the past outsourcing typically meant a “lift and shift” of current processes to take advantage of lower labor costs. In today’s business environment, Managed Services providers are bringing a broad array of strategic capabilities and technology-based solutions to optimize customer operations. With diligence and attention to defining requirements your organization will be able to find a solution provider that can deliver the results you need to improve your operations and cut bottom line costs.


Now is the time to invest invest in your Accounts Payable department. By pursuing any one of the AP transformation strategies discussed within this article, or a combination of multiple strategies, your organization will benefit from increased efficiency, reduced risk, improved supplier relationships, and more informed spend decision making. If you are unsure about where to begin, start by reaching out to Corcentric.


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Pat Baumgardner

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