The Link between AP and Procurement Grows Stronger

Accounts Payable and Finance

More than 85% of companies surveyed have some collaborative relationship between the accounts payable and procurement departments, says TAPN’s latest AP report.

One of the biggest changes occurring within enterprises is the breaking down of silos and the increasing collaboration between accounts payable and purchasing. Now, The Accounts Payable Network (TAPN) notes that development in its State of Accounts Payable 2015 report. The survey of almost 600 predominantly North American companies, ranging in revenue from under $5 million to over $5 billion, covers a wide range of topics relevant to AP; among them, the consistent move towards centralization of functions.

The report states that although there has been an ongoing conversation for the need to create a more cohesive relationship between the two functions, that conversation is increasingly being turned into action. One reason for this, though not specifically stated in the report, is an understanding that procure-to-pay is less a series of functions than it is an end-to-end process. This makes the need for open communication and collaboration more important than ever:

  • 42% of companies stated that AP and purchasing are well coordinated
  • 33% indicated that some collaboration exists
  • 11% actually have AP as part of the purchasing group/department
  • Only 12% said that there was no collaboration at all, and 2% indicated some other structure

Looking at the total number, more than 85% of companies surveyed now have a collaborative working relationship between their accounts payable department and their purchasing department. This has also increased the interest in and move towards automating these processes. Five years ago, the report notes, improving processes was the top concern for AP. That is still the case; however, the second biggest concern was on-time payments. That has been surpassed by automating manual processes. This makes total sense since companies have found that automation is the pathway that leads to improved processes.

Yet, with this in mind, the ability to get capital expense dollars for AP automation and process improvement is still lagging. The TAPN report finds that a disappointing 71% of the respondents find it is somewhat or extremely difficult to access those dollars. Only 5% find it not at all difficult. And even more disappointing, though acknowledged by most people in the profession, a majority of companies (52%) are still married to paper when it comes to receiving invoices, while only 13% receive them electronically. This will undoubtedly change as e-invoicing becomes mandated in more and more situations and as companies come to better understand the increased efficiencies, savings, and business intelligence that can be found through automating the entire P2P process.

So where is this headed? I’ll let the report speak for itself: “The advance in accounts payable operations and, therefore, performance is gradual. Nevertheless, from 2012 until 2015, progress can be seen in the broad picture of the continuum, from accounts payable as it has been for a very long time to accounts payable as it can be and is becoming. Through centralization, shared services, process improvement, automation and end-to-end thinking, organizations are changing how accounts payable is done and as a result, beginning to capture value from it.”

See how automating your P2P process can help you achieve your goals. Sign up for a free demo today.

Kate Freer

About Kate Freer

Kate Freer is Vice President of Marketing for AmeriQuest Business Services. In this role, Kate is responsible for AmeriQuest’s marketing and communications activities, including image and market development, corporate communications, media relations, brand management, advertising, and market research and analysis. She leads go-to-market strategy for AmeriQuest and its subsidiary companies.Prior to her current role, Ms. Freer served as Director of Marketing of AmeriQuest. She joined the company in 2004 as Marketing Manager, was promoted to Director in 2007, and subsequently promoted to Vice President of Marketing in 2012.Before joining AmeriQuest, Ms. Freer held various marketing, communications, and advertising roles in the publishing industry for Information Today, Inc. and the Courier-Post, a Gannett company.Ms. Freer holds a Bachelor of Science degree from Stockton University.

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