The Accounts Payable Category

3 Ways Ineffective AP Processes are Endangering Your Supply Chain

Procurement organizations tend to focus on the “procure” part of the procure-to-pay (P2P) process; so much so that the second “P” often has to take a back seat. Yet the payments side of P2P offers strategic opportunities that procurement should consider — as well as critical risks that it must take into account. When AP processes are neglected, they can endanger your supply chain, tarnish supplier relationships, and jeopardize supply quality and continuity. Following are three ways those negative impacts can occur, along with recommendations for turning these possible risks into strategic opportunities.

Everything Procurement Should Know About Payments (Part 6): Payment Best Practices and Recommendations [PRO]

early pay

Our goal in this research series on payments has been to provide procurement with a single point of reference to understand all of the intricacies and challenges associated with standard payment processes today, as well as the limitations of existing procure-to-pay (P2P) solutions when it comes to addressing payments in full. Spend Matters PRO subscribers can access the individual parts below:

The final installment in this series summarizes payment best practices today and provides recommendations to procurement organizations looking to take a leadership role in driving integrated processes that bridge supplier management, transactional buying, accounts payable, payment and working capital management processes.

Everything Procurement Should Know About Payments (Part 4): Setting Up Suppliers for Payment — The Intersection of P2P and Supplier Management (Part 4) [PRO]

Historically, most procure-to-pay solutions have put advanced supplier management capability on the back burner from a strategic development perspective. At best, they have paid lip service when attempting to tie a powerful supplier information management (SIM) capability into P2P and supplier network offerings (i.e., one-to-many or many-to-many connectivity approaches). While this is beginning to change, in general the worlds of collecting, validating, managing and keeping supplier record information up to date to enable timely payment and accounts payable vendor outreach are rarely bridged fully.

This Spend Matters PRO brief, the fourth in our series providing a comprehensive primer on everything “payments” from a procurement perspective, provides a background briefing on why collecting supplier information is critical to enable payments and a checklist for setting suppliers up for payment, starting with initial on-boarding steps. (See Part 1: Procurement’s Role and P2P Case Examples; Part 2: Best-in-Class P2P Technology Capabilities and the Reconciliation Process; and Part 3: Payment Operations — Challenges and Opportunities.) It also provides a vendor data collection template for basic and advanced fields that companies should compare against their own for an accounts payable-centric on-boarding process spanning company, ownership, insurance and remit/banking details. Finally, Part 4 concludes with examples of technology enablement capability that advanced supplier information systems can bring for supplier on-boarding and data maintenance.

New Research: Today’s AP Organizations Need to Do More to Minimize Risk

risk

All fields evolve, but accounts payable (AP) has undergone truly big changes in the past four decades, moving from being a set of decentralized, manual processes to a strategic organization working alongside procurement and other functions, not to mention the important value AP can provide in risk management. Today’s AP organizations represent a wide range of performances, according to APEX Analytix’s 2017 Financial Leaders’ Benchmarking Report, which surveyed Global 1000 businesses across numerous industries.

Everything Procurement Should Know About Payments: Best-in-Class P2P Technology Capabilities and the Reconciliation Process (Part 2) [PRO]

BuyerQuest

There have been two (somewhat bad) jokes around product naming since procurement technology adoption became widespread. The first was when SAP labeled its e-procurement product “supplier relationship management” (SRM), which was a misnomer, to say the least. SRM, which competed against Ariba, Commerce One and others at the time, was about managing transactional buying, not about strategic supplier relationships. The other naming “fail” was unfortunately more generalized outside of a single provider, and that was labeling the broader transactional procurement tech sector as “P2P,” with the second “P” standing for “payment.”

If there is a silver lining in this naming misstep, however, it’s that we have the power to actually do something about it today. P2P solutions are finally beginning to embrace the payment ecosystem more holistically, and procurement is taking an orchestration role in the process. This Spend Matters PRO series provides a procurement-centric view into payments, exploring the payments process and all that it encompasses through a “get smart” primer.

Part 1 provided an introduction to the topic and explored what e-procurement systems do (and do not do) to enable payment processes. It also explored what SAP Ariba and Coupa have developed from an integrated e-procurement, e-invoicing and payments offering perspective though various partnerships. The second installment in this series provides a summary checklist of best-in-class e-procurement and e-invoicing native payment capability and integrations (internal system and third party) to enable payments and an overview of the invoice to reconciliation process, outside of P2P systems alone. It includes an introduction to various electronic funds transfer (ETF) models, tax considerations, currency considerations and related topics. It also includes a look at all of the internal and external functions and parties involved in different stages of the reconciliation process.

Why Partial Automation Will Be a Smart Tool — Not a Replacement — For the AP Clerk

e-invoicing

Spend Matters welcomes this guest post from Laurent Charpentier, chief innovation officer at Yooz North America.

Accounts payable (AP) clerks at leading companies are already seeing machine-learning programs automate and streamline their daily work, flagging suspicious invoices, reducing cycle time and saving their organizations money. Artificial intelligence is boosting efficiency and making life easier for thousands of AP professionals today. But many of these professionals are undoubtedly wondering if sophisticated software might one day put them out of a job.

Everything Procurement Should Know About Payments: Procurement’s Role and P2P Case Examples (Part 1) [PRO]

E-procurement is essentially what is sounds like. The same goes for e-invoicing, too. But when you add payments to the equation, things get messy.

Whether procurement and finance organizations are looking for an integrated procure-to-pay (P2P) solution or standalone invoice-to-pay (I2P) technology, the notion of either solution incorporating end-to-end payment and reconciliation capability is misleading at best. Granted, some providers, such as SAP Ariba and Coupa, have taken steps toward enabling the payment lifecycle through partnerships. But their payment solutions focus on the outcome rather than providing a broader toolbox around payment process management and reconciliation for buyers and suppliers alike.

How can these vendors, which deal predominantly in indirect goods, influence the total payment picture?

This Spend Matters PRO research series unearths the often misunderstood components of the “second P” in P2P. We start with a high-level overview of what procurement systems do (and do not) do today to enable payment processes, as well as what procurement’s responsibilities for payments are (and are not). We also profile what SAP Ariba and Coupa are enabling on the payments front, as well as the general approaches of other vendors.

Subsequent briefs in the series will provide a detailed summary of best-in-class e-procurement and e-invoicing native payment capability and integrations to enable payments, a detailed overview of the invoice to reconciliation process, an exploration of P2P and payments best practices, and guides for how to set up suppliers for payment in a system, the integration of cash management and payments, how to think about trade financing and payments, and the role of shared services in payments.

Freeing Yourself From the Chains of the DPO Stretch: An Empirical and Experiential Analysis [Plus+]

Before on Spend Matters, I highlighted an analysis where, in 12 of 14 manufacturing industries I analyzed, I found negative correlations between Days Payable Outstanding (DPO) and enterprise performance (e.g., debt you may incur to raise cash to invest in high payback initiatives such as B2B trade financing where early payment discounts and/or supply chain finance programs are established). In this Spend Matters Plus article, I’ll dive into the industry details and also provide some additional insights based on some research that we conducted with the Institute for Supply Management (ISM).

How to Smooth Manufacturer-Supplier Relationships Through AP Automation

Spend Matters welcomes this guest post from Howie Hahn, senior sales engineer at Esker.

Success in manufacturing depends on the mutually beneficial relationships between manufacturers and suppliers. Each party relies on the other to live up to its obligations, if either expects to move towards long-term success and growth. But business, like life, doesn’t always go as planned. Even relationships based on trust and mutual benefit can get rocky.

The key is to make sure that the inevitable bumps in the road don’t morph into ill feelings, mistrust or, worse, lawsuits. One tool that can help ensure that manufacturers and suppliers maintain smooth relationships is accounts payable (AP) automation.

Accounts Payable and Digital Transformation: The Next Frontier

finance

Spend Matters welcomes this guest post from Anna Tujunen, head of product at Dooap.

Digital transformation, buzzword or not, is vital to the success of today’s business. In the immortal words of Microsoft CEO Satya Nadella, “Every company is a software company.” It’s no longer an option to incorporate technology into company organization but a necessity. There is no other option but to go digital or go down with the past. Many areas of business and development have been impacted by digital transformation, including HR, DevOps, asset management, and finance. It’s high time for accounts payable to join the digital revolution.

SciQuest: Solution Review & Analysis [Plus+]

SciQuest is arguably the most challenging procurement technology suite vendor to compare directly to the competition. This perhaps explains why it has tended to surface less in competitive procure-to-pay (P2P) or source-to-pay (S2P) suite opportunities outside of its traditional key vertical sectors for transactional procurement (e.g., higher education, laboratory/research, life sciences, public sector) in the past. While it is possible to label SciQuest as a procurement technology suite vendor (source-to-pay, source-to-contract and procure-to-pay), the reality is that to date, the provider has competed in multiple, infrequently overlapping segments of the procurement technology market.

Historically, SciQuest has generally had different sets of customers, prospects and competitors for its core P2P product and its sourcing optimization, spend/supply analytics and contract lifecycle management solutions. This stands in contrast to many of its peers, which have generally chosen to focus on fewer market segments (e.g, eProcurement, invoice-to-pay, etc.) rather than more as primary entry points to customers.

Yet after being acquired by Accel-KKR last year, SciQuest has started an accelerated strategic and marketing transformation process that is uniting its disparate suite elements. Today’s Spend Matters Plus analysis provides an introduction to SciQuest for procurement organizations looking to understand whether they should consider adding the provider to their shortlists for consideration, as well as competitive alternatives.