1st August, 2016
Over the last few years those working in accounts payable have been on a journey. What was once considered a back office, purely transactional function has evolved into something infinitely more strategic. A career in accounts payable now represents an end goal, rather than a stepping stone on the way to somewhere else. Or at least, that's what we keep hearing.
And yet, sometimes it’s difficult to quantify that change when some of the language and problems remain the same – the need to remove paper from the system, the long awaited tipping point for einvoicing, the existence of silos and a failure of technology to connect. So we took a look at a few of the key issues to see how much has really changed over the years.
One of the main areas of change has been within the take up of automation. Back in 2011, just over half of AP departments were still working in a mostly manual environment, with only 5% saying that the majority of their processing was automated. Stepping forward five years, those figures have shown an interesting shift. The numbers operating in a mostly manual way have gone down to 39%, while those working in a mostly automated fashion (less than 20% manual) have leapt to 30%.
Other areas, such as the increased collaboration between P2P, seem to have made some big changes in the three years from 2010 – 2013, with around 43% of organisations saying it was something that had improved over that time frame. And that's something which has provided the perfect environment for a more dramatic culture change, with the number of organisations with ambitions to merge departments into one P2P area rising from 11% in 2013 to 21% this year.
There’s always some debate as to whether that’s driven by business strategy or by the enabling technology – the truth is probably that the two go hand in hand and alongside other drivers such as the increased prevalence of someone who heads up the whole area such as a global head of P2P or Director of P2P for example. Alongside cost saving efficiencies, the drive towards closer collaboration has also led to a growth in both the taking and analysis of departmental metrics.
And it’s this area which is so attractive to those working with and in this space right now. The constant monitoring and extraction of real time data ultimately leads to better control and visibility, and for those involved, a better company voice.
Being able to make effective use of that data has helped some organisations to weather the globally turbulent economic conditions over this time frame. Some have had to look more creatively at their cash management – and we’ve seen an increase in the use of traditional supply chain finance, with just over a third of organisations using it this year. Despite this, alternative methods of invoice financing, such as dynamic discounting are taking some time to gain significant traction. Even so, it looks like that's about to change, as 12% of organisations did expect to either use it, or investigate using it over the next 18 months.
So perhaps we’re never really going to be “nearly there” in terms of being able to say P2P is now "Transformed", but that doesn’t mean enormous amounts of progress haven’t been made. As any parent of young children heading off on their holidays this month knows, as soon as the brow of one distant hill comes into view, attention is focused on the next one.