An Opportune Time for Collaboration: Procurement and Accounts Payable (Part 1)

Historically, procurement and accounts payable have been slightly awkward bedfellows in many companies. They’ve been loosely coupled through the front-end (e.g., vendor on-boarding, registration process) and the back-end (e.g., approvals, dispute management, discounting, payment, invoice auditing) in both online and offline worlds for various aspects of supplier engagement and management.

Yet in the past decade, procurement as a role and business focus (not always as function, mind you) has garnered greater respect as a means of driving bottom line savings — often identified, not always implemented. It has still been one part of an odd couple, unfortunately, but the lesser odd partner. But that’s the subject for another post, let alone a volume of books. More important, for our purposes, accounts payable has not garnered the same level of interest, and has truly remained an odd cost-center and stepchild under the broader finance umbrella.

In fact, as many procurement organizations have been able to make the business case for more strategic resources based on quantifiable value (e.g., cost reduction, risk analysis/reduction) in the past decade, accounts payable has faced a near constant pressure to cut costs through reduced resources based on various automation schemes — internal shared services, business process outsourcing (BPO), technology or a combination thereof.

Procurement has not been overly keen on taking ownership of accounts payable, either. This goes back a long way. One of my favorites comes from Spend Matters UK/Europe Managing Director Peter Smith. Below, we feature his story and view into accounts payable from a CPO perspective.