AP automation's changing role

AP’s role has historically involved making sure the books are balanced and vendors are paid. Yet, it is becoming common for AP/finance teams to do much more because of mounting pressure to turn them into a revenue-generating department. They’re now becoming increasingly responsible for anything from shopping for payment cards (“vCards”) with cash-back incentives (that are often unattainable) to driving supplier efficiency and maintaining relationships. This pressure is in part influenced by pandemic-related supply chain disruptions and stunted revenue; businesses are willing to get as creative as possible to improve their bottom line. Long before the pandemic, however, there had been a push for automation which has, in turn, shifted the AP role. There is a modern-day notion, largely pushed by solution providers, that AP professionals can have “more time for strategic work” thanks to automation.

It’s true that AP automation solutions do free up time for more strategic work. These solutions can automatically review, approve and route invoices (that match a PO, goods receipt or contract) to an AP system and re-route those requiring manual correction. This eases the challenge of having to chase and process payments or track disparate payment terms across a large, complex network of suppliers. With evolving artificial intelligence and machine learning, we could reach a place where invoices are processed and paid with little to no human intervention. 

However, freed up time for “strategic work” should not necessarily include supplier outreach programs where AP manages the process of persuading and migrating suppliers between payment types. While this work might seem strategic, it isn’t within AP’s scope. Strategic work for AP professionals can instead look like:

1. Actually making use of business data: when data is collected in an end-to-end program that unites procurement and AP (i.e. procure-to-pay software), AP teams can better manage cash flow which can inform supplier payment timelines
2. Pinpointing and addressing internal bottlenecks thanks to enhanced and shared visibility of procure-to-pay processes 
3. Taking ownership of fraud detection: fraud is on the rise, and automation enables uniform and more thorough data practices so that invoice discrepancies and other anomalies are more easily detected
4. Polishing their coding and data-analytics skills: automation comes hand-in-hand with data, which means AP should be learning to run, and interpret, financial reports 
5. Sharing company-wide spend insight with teams: AP intersects most organizational functions and can bring unique value

Basically, AP’s role should be increasingly influential – not administrative! Desperate attempts to get as many suppliers as possible to accept vCards in order to meet rebate requirements is a job in and of itself. Handing this work to AP is a diversion, and the AP function is essential and needs to be treated as such. Any added pressure on AP to bring in savings by the end of the year is a sign that roles need to be reassessed and new solutions need to be considered.

Wouldn’t it be great to have a solution that can pay all your suppliers for you through a single channel, consolidating all payment processes (i.e. check, ACH, card) into one digital process? The overhead costs of supplier management could be alleviated and suppliers could get paid faster; enriching supplier relationships long term, eliminating late-payment fees, and creating savings through early-payment discounts. Solutions like Medius Pay can provide all of the above, not to mention that adopters benefit from enhanced security, clear audit trails and spend visibility so that AP can excel at their job (e.g. detecting fraud, interpreting and presenting spend). To top it all off, Medius delivers guaranteed dividends from supplier card payments to form a steady, fixed revenue stream back into the business so that AP can be a revenue-generating function but without any additional work. Ultimately, unlocking AP’s full potential really does start with implementing an AP automation solution because, you know - it allows more time for strategic work.