Do you ever feel like your Accounts Payable (AP) department operates on an island, disconnected from the rest of the procurement process?

You’re not alone.

Silos between AP and Procure-to-Pay (P2P) are a common roadblock in many organisations. This can lead to inefficiencies, delays, and frustration on both sides.

But what if there was a better way? By fostering collaboration and breaking down those silos, AP and P2P can work together seamlessly to create a more efficient and streamlined process.

In this article, we’ll explore some helpful strategies to achieve this synergy:

Shared Goals, Shared Vision: Building the Bridge Between AP and P2P

Understanding the Big Picture:

While AP and P2P have distinct roles within the procurement process, their ultimate goals are intertwined. Both departments contribute to the smooth flow of goods, services, and payments, ensuring the organisation gets what it needs to operate effectively.

Here’s a breakdown of their shared objectives:

Cost Efficiency: Both sides aim to acquire goods and services at the best possible price, negotiating favorable terms with vendors and avoiding unnecessary spending.

Timely Transactions: Ensuring invoices are processed and payments issued promptly keeps suppliers happy and avoids late fees.

Data Accuracy: Accurate data entry throughout the process minimizes errors and streamlines workflow.

Internal Controls: Both AP and P2P play a role in upholding internal controls to prevent fraud and ensure proper financial oversight.

Bridging the Gap:

Once both departments understand these shared goals, it’s time to break down the walls. Here are some ways to foster a shared vision:

Joint Training Sessions: Organise training sessions where AP and P2P teams learn about each other’s functions. Understanding each other’s challenges and processes fosters empathy and collaboration.

Shared Performance Metrics: Track key performance indicators (KPIs) that reflect the shared goals, such as cycle times, early payment discounts captured, and error rates. This incentivises both teams to work together towards improvement.

Cross-Departmental Collaboration Tools: Utilize collaborative platforms or dashboards that provide both departments with real-time visibility into the procurement process. This fosters transparency and streamlines communication.

Benefits of a Shared Vision:

By establishing a shared vision and fostering collaboration, AP and P2P can achieve significant benefits:

1. Improved Efficiency: Streamlined workflows and better communication lead to faster processing times and reduced errors.

2. Cost Savings: Negotiating better terms with vendors and avoiding delays in payments can lead to significant cost savings.

3. Enhanced Risk Management: Stronger internal controls achieved through collaboration can minimize the risk of fraud and errors.

4. Improved Team Morale: When teams work together towards shared goals, it fosters a more positive and collaborative work environment.

By taking the time to build a shared vision and understanding, AP and P2P can transform from isolated departments into a well-oiled machine, driving greater efficiency and success for the entire organisation.

Communication is Key: Unlocking Seamless Collaboration Between AP and P2P

Open communication is the lifeblood of any successful collaboration. When AP and P2P departments break down communication barriers, they unlock a world of efficiency and improved outcomes.

Here’s how to establish clear communication channels and protocols for a seamless workflow:

Building Bridges of Communication:

1. Regular Check-Ins: Foster a culture of open communication by scheduling regular meetings between AP and P2P teams. These meetings can be weekly, bi-weekly, or monthly, depending on your needs. Discuss upcoming projects, identify potential roadblocks, and brainstorm solutions together.

2. Dedicated Communication Channels: Avoid relying on a sporadic flow of emails. Establish dedicated communication channels for quick and easy exchange of information. Explore options like instant messaging platforms, shared team folders, or even a ticketing system for specific issues.

3. Liaison Power: Consider appointing dedicated liaisons from each department. These individuals would act as communication champions, ensuring smooth information flow and addressing any concerns from their respective teams.

Tools for Effective Communication:

Technology can be a powerful ally in fostering communication.

Here are some tools to consider:

Shared Communication Platforms: Utilize collaborative platforms like project management software or team communication tools. These platforms provide a central hub for sharing documents, assigning tasks, and keeping everyone on the same page.
Standardised Reporting: Implement standardized reporting formats to share data and updates consistently. This ensures everyone is working with the same information and reduces the risk of miscommunication.
Automated Alerts: Set up automated alerts for critical information such as upcoming invoice due dates, purchase order discrepancies, or potential fraud alerts. This proactive approach keeps both teams informed.

Transparency is Your Friend: Shining a Light on Shared Data

Transparency is key to building trust and ensuring both AP and P2P departments are operating at peak efficiency. This means providing clear and easy access to all relevant information for both teams. Here’s how to break down data silos and embrace transparency:

Breaking Down the Data Walls:

Many organisations struggle with data silos, where information is stored in separate systems for AP and P2P. This leads to duplicate data entry, inconsistencies, and difficulty accessing critical information. Let’s break down these walls and embrace transparency:

Centralised Systems: Explore implementing a centralized system for purchase orders, invoices, and supplier data. This can be a dedicated Enterprise Resource Planning (ERP) system or a cloud-based solution specifically designed for procurement. A centralised system ensures everyone is working from the same set of data, minimizing errors and streamlining the workflow.

Real-Time Visibility: Look for solutions that offer real-time visibility into the procurement process. This allows both AP and P2P to track the status of orders, invoices, and payments in real-time, facilitating proactive communication and problem-solving.

Standardised Data Entry: Establish standardized data entry protocols for purchase orders, invoices, and supplier information. This ensures consistency across the system and minimizes the risk of errors due to data variations.

Benefits of Transparency: By embracing transparency, AP and P2P departments can reap several benefits:

Reduced Errors: Working from a single source of truth eliminates discrepancies and data entry errors, leading to more accurate and efficient processes.

Improved Collaboration: Transparency fosters a culture of collaboration. Both teams have a clear understanding of the bigger picture and can work together more effectively to achieve shared goals.

Enhanced Decision-Making: Access to accurate and complete data empowers both departments to make informed decisions that positively impact the procurement process.

Increased Accountability: Transparency holds everyone accountable. Knowing that data is readily available encourages accuracy and promotes a culture of ownership within both departments.

Building a Foundation of Trust:
Transparency is more than just access to data; it’s about building trust. By openly sharing information and collaborating effectively, AP and P2P departments can create a foundation of trust that fosters a more positive and productive work environment.

Embrace Automation: Freeing Up Time for Strategic Collaboration

In today’s digital age, automation is a game-changer for breaking down silos and boosting collaboration between AP and P2P departments. By automating repetitive tasks, both teams can free up valuable time and resources to focus on more strategic initiatives. Here’s how to leverage automation for a smoother workflow:

Automating the Mundane:

Many tasks within the procurement process are manual and time-consuming.

These include:

Data Entry: Automating invoice data entry through AP Automation technology eliminates manual keying and streamlines the process.
Approval Workflows: Implement automated approval workflows for invoices based on pre-defined rules. This reduces manual routing and ensures timely approvals.

Matching Processes: Utilise automation for three-way matching of invoices with purchase orders and receiving reports. This minimises discrepancies and speeds up payment processing.

Focus on What Matters:

By automating these tasks, both AP and P2P are freed from the burden of manual work.

This allows them to focus on more strategic activities such as:

Vendor Management: Building stronger relationships with key vendors, negotiating better terms, and identifying opportunities for cost savings.

Process Improvement: Continuously evaluating and improving the procurement process to identify inefficiencies and implement more efficient workflows.

Risk Management: Collaborating on strategies to mitigate risks associated with fraud or errors in the procurement process.

Data Analysis: Utilising data from the procurement process to identify trends and make informed decisions about future purchases and supplier relationships.

Collaboration, Amplified:

Automation doesn’t replace collaboration, it amplifies it.

By freeing up time from repetitive tasks, both teams can dedicate more resources to working together on strategic initiatives. This fosters a more collaborative environment where both AP and P2P can contribute their expertise to achieve greater efficiency and cost savings for the organisation.

The Future of Collaboration:

Automation is not a one-time fix.

As technology evolves, explore integrating artificial intelligence (AI) and machine learning (ML) into your systems. These tools can further streamline processes, identify anomalies, and provide predictive insights, allowing both AP and P2P to work even more collaboratively and strategically.

By embracing automation and focusing on strategic collaboration, AP and P2P departments can transform their roles from back-office functions to strategic partners driving organizational success.

Celebrate Successes: Highlighting the Power of Teamwork

Collaboration thrives on recognition. When AP and P2P departments work together to achieve successful outcomes, celebrating those wins is crucial. Here’s why recognizing teamwork matters:

Building Morale and Motivation: Taking the time to acknowledge collaborative achievements motivates both teams. It shows them that their hard work and cooperation pay off, fostering a sense of accomplishment and encouraging them to continue working together in the future.

Reinforcing the Value of Collaboration: By celebrating collaborative wins, you send a clear message that teamwork is valued. This reinforces a positive culture where collaboration is seen as the key to success, not just within the procurement process, but potentially across the entire organization.

Ideas for Celebrating Success:

There are many ways to celebrate successful teamwork between AP and P2P:

Public Recognition: Acknowledge the successful collaboration in a company-wide email or newsletter, highlighting the specific teams and individuals involved.

Team Lunch or Outing: Organize a celebratory lunch or team outing to acknowledge the achievement in a more informal setting.

Performance Reviews: Highlight the successful collaboration in individual performance reviews, demonstrating the value of teamwork to career advancement.

Peer-to-Peer Recognition: Implement a program where team members can recognize each other’s contributions to the successful collaboration.

A Celebration of Shared Success:

Celebrating collaborative wins is not about individual accolades; it’s about acknowledging the power of working together.

By recognizing teamwork, you motivate both AP and P2P to continue collaborating towards achieving even greater successes in the future.

This, in turn, strengthens the overall efficiency and effectiveness of the procurement process, benefiting the entire organization.

Let’s Break Down Those Silos!

By implementing these strategies, AP and P2P departments can move beyond isolated operations and build a truly collaborative partnership. This will not only lead to greater efficiency and cost savings, but also create a more positive and productive work environment for everyone involved.

Taking the Next Step

Breaking down silos and fostering collaboration between AP and P2P is an ongoing process.

However, by prioritizing communication, transparency, and teamwork, organizations can create a more streamlined and efficient procurement process that delivers significant benefits for the entire business.

We hope this article has provided valuable insights on how AP and P2P departments can work together seamlessly.

Last week, our esteemed CEO Jamie Radford had the pleasure of attending the prestigious CICM Credit Awards as guests of O2C Labs. It was an unforgettable evening, filled with camaraderie and recognition for the outstanding achievements of teams and individuals within the credit industry.

Our highlights from the evening

Sue Chapple, the esteemed CEO of CICM, delivered a captivating opening address, delving into the rich history of the Institute dating back to its inception in 1939. Her insights provided a profound perspective on the evolution and significance of credit management over the decades.

One of the most striking aspects of the evening was the diverse array of winners hailing from various industries and backgrounds. This diversity mirrors the multifaceted nature of the payable profession, where individuals from all walks of life come together to contribute their unique skills and perspectives.

What truly resonated throughout the event was the undeniable overlap and shared challenges between the accounts payable and credit sectors. Despite the differences in focus, both industries grapple with similar obstacles, with one common denominator standing out above all else – the “People.”

At both the Credit Awards and the APA Awards, individuals remained at the heart of achieving high performance and driving business results. It’s a testament to the unwavering dedication and commitment of professionals across these sectors who understand that success is not merely about numbers, but about the people behind them.

Empowering the Industry with pivotal Partnerships

So let’s spotlight the pivotal relationship between Accounts Payable and Credit teams and why their synergy is a game-changer.

⚡ Efficiency Amplified: By harmonising AP and Credit operations, organisations unleash a powerhouse of efficiency. Streamlined processes ensure invoices are promptly processed and payments are made on time, optimising cash flow management.

💡 Insightful Decision-Making: The fusion of AP and Credit data offers a panoramic view of financial health. From identifying trends to mitigating risks, this comprehensive insight empowers informed decision-making at every turn.

🤝 Seamless Communication: Effective collaboration bridges the gap between departments, fostering seamless communication. Whether it’s resolving discrepancies or addressing vendor concerns, a united front ensures swift resolutions and strengthens vendor relationships.

🌐 Global Impact: In today’s interconnected world, the impact of collaboration transcends borders. By aligning AP and Credit strategies across regions, organisations not only ensure compliance but also enhance their global footprint.

💥 Driving Innovation: Collaboration breeds innovation. When AP and Credit teams join forces, they become catalysts for transformative change. From adopting cutting-edge technologies to pioneering best practices, this synergy propels organisations towards the forefront of industry innovation.

🚀 Future-Proofing Success: In a landscape characterised by constant evolution, collaboration is the cornerstone of future-proofing success. By fostering a culture of collaboration, organisations adapt, thrive, and remain agile in the face of ever-changing financial landscapes.

👥 As we champion collaboration, let’s recognise the invaluable role of every individual within the AP and Credit ecosystem. Together, we’re not just shaping the future of finance we’re redefining it.

As we reflect on the inspiring evening at the CICM Credit Awards, let’s carry forward this spirit of collaboration and appreciation for the invaluable contributions of individuals within our respective industries. Together, we can continue to elevate the standards of excellence and drive positive change within the realms of credit management and accounts payable.

Thank you Credit Community 🙏

Special thanks to Chris Sanders FCICM , Laurie Beagle FCICM & Kerry McKevitt MBA from The Order to Cash Laboratory Ltd for the invite & hospitality.

The Accounts Payable Association, at the forefront of pioneering solutions for professionals in the industry, is delighted to announce its newly enhanced website crafted exclusively for Accounts Payable Professionals.

In response to the dynamic landscape of financial management and the increasing demand for streamlined processes, the Accounts Payable Association is thrilled to unveil a redesigned and feature-rich website catering to Accounts Payable Professionals. This online platform aims to empower experts with cutting-edge education, resources, and an easy-to-use Events Calendar, giving professionals the tools and knowledge to manage and optimise Accounts Payable processes.

What does the website have to offer?

The newly launched website offers a comprehensive suite of features designed to enhance efficiency and productivity for Accounts Payable Professionals. Key highlights include:

• Intuitive Interface: A user-friendly interface ensures seamless navigation, providing quick access to essential tools and resources.

• Resource Hub: A robust resource hub houses industry insights, educational masterclasses, industry news and updates on best practices, equipping professionals with the knowledge to stay ahead in a rapidly evolving Accounts Payable landscape.

• New E-commerce Journey: Discover a streamlined and user-friendly e-commerce experience for easy access to association courses, memberships, and more.

• Dynamic Events Calendar: Never miss out on an industry event again with our comprehensive Events Calendar. Stay up-to-date on future events, workshops and webinars, with the ability to register interest and secure your ticket(s) there and then.

A few words from Jamie Radford

“Accounts Payable Association is dedicated to empowering Accounts Payable professionals with the tools and knowledge they need to succeed. The launch of our new website signifies our commitment to providing the Accounts Payable industry with a community and opportunity to enable Professionals to navigate the complexities of Accounts Payable easily and efficiently.”

Jamie Radford, CEO, Accounts Payable Association

With AP Appreciation Week finished for another year, we are taking the time to reflect on what was a successful and thought-provoking five days.

Last Tuesday, we were joined by over 100 Accounts Payable and P2P professionals in Oxford for one of our biggest events of the year, the AP & P2P Forum. Over the course of the day, we were led by special guest panels in identifying the barriers we face within the community, how technology can be used to tackle those obstacles, and what we can expect for the future.

As the scene was set for the first panel of the day, the audience quickly identified an often fraught relationship between Accounts Payable departments and P2P as a reoccurring barrier. Steered by the session host Philip Spence, each panellist was able to describe how they have been able to work alongside their procurement teams and finance departments, developing a working relationship and ensuring communication. ‘Sometimes it is about winning hearts and minds to ensure that relationships can thrive’.

For the second panel of the day, Max Kent of PSL led the debate on ‘The Ostrich Effect’, avoiding change and technology to the detriment of a business. Many attendees revealed that resistance to the ‘new’ usually stemmed from fear of job security, with anxiety that automated technology reduced workloads and the necessity for staff. With a refreshing take on a common problem, delegates revealed how they had successfully overcome this. By communicating the benefits of new systems and highlighting how reduced manual work could allow for more time analyising and improving processes, they were able to effectively implement new systems with the support of their staff. Echoing similar sentiments to the first panel, it highlighted how communication was once again essential, whether between teams or internally.

Throwing it back to earlier days in his career, automation expert Jethro Elvin of Basware shared an interesting example of how fostering positive relationships was paramount. Explaining his time spent visiting suppliers, Jethro recalled working alongside the Mersey River with factory workers, filling Jammie Dodgers with hungry wasps swarming around. Being able to understand the processes of these workers, and the problems they faced, helped Jethro to develop a stronger working relationship with that supplier. Almost 20 years later, Jethro remains a strong advocate for putting yourself in another’s shoes.

Our special guest speaker spoke of his experience becoming a World Champion and Olympic athlete twice-over, providing attendees with the drive to conquer their dreams. . To change our perception of success into a reality, we must consider all that we need to achieve and the steps required to get there. The inspiring session questioned, ‘How can we instigate our own success, and how can we facilitate our own cycle of change?’

So, what can we take home from the AP Forum?

As AP teams across the country celebrated each other and their profession during AP Appreciation Week, it is clearer than ever that the drive to change and elevate our profession is there. But how can we facilitate this change ourselves?

The AP Forum provided some essential take-home messages, that we can champion ourselves, and with perseverance, we can create our own cycle of change. So why not give the following a try and see where it can take you?

Communicating

Whether we are liaising with suppliers and customers, working with other departments or speaking to team members, ensuring we communicate effectively is essential for developing positive working relationships. Taking the time to get to know one another personally and professionally can help us sympathise with one another and adapt to a more cooperative way of working.

Learning and Developing

Recognising our limitations at work can sometimes be the hardest challenge, however, learning from our mistakes and working on our weaknesses can often have the biggest positive impact. With the launch of software such as ACT, which enables AP teams to analyse where there is room for improvement and then tailor their training accordingly, it is now easier than ever to develop professionally and streamline a department.

Inspiring

For the last session of the day at the AP and P2P Forum, the discussion moved to the future of Accounts Payable and the workforce of tomorrow. Inspiring the next generation of AP professionals and instilling them with the same passion for the industry is essential for continuing the progress we have made as a collective. By encouraging more newcomers to consider Accounts Payable as a long-term career in which they can progress, we can help to continue raising the standards and perception of the industry.

What is the impact of treating accounts payable as a silo function within an organisation?

We’re exploring the importance of engaging with key internal and external stakeholders, including suppliers, business operations, procurement, and the wider finance community.
Let’s break down the barriers and foster collaborative relationships for a stronger, more efficient financial ecosystem.

The Impact of Accounts Payable as a Silo Function

Accounts Payable is often seen as an isolated department focused solely on processing invoices and making payments. However, this silo mentality can have several negative consequences on the overall efficiency and effectiveness of an organisation:

1. Missed Opportunities for Cost Savings: When Accounts Payable operates independently, it may miss out on identifying potential cost-saving opportunities in supplier contracts and payment terms. Collaborating with procurement and finance teams can lead to more favourable arrangements and improved cash flow.

2. Lack of Transparency: Siloed functions can lead to a lack of transparency and communication between departments. This can result in delayed invoice processing, disputes with suppliers, and ultimately harm business relationships.

3. Increased Errors and Fraud Risks: A lack of integration with other departments may increase the likelihood of errors and fraud. Engaging with stakeholders ensures multiple sets of eyes on financial processes, mitigating risks.

Engaging with Key Internal Stakeholders

1. Procurement Collaboration: Establish a regular feedback loop between Accounts Payable and Procurement teams. By involving AP in the procurement process, they can provide insights on supplier payment preferences and help negotiate better terms.

2. Business Operations Integration: Work closely with business operations teams to understand their requirements for timely payments. Regular meetings can help identify recurring issues and improve the invoice approval workflow.

3. Finance Team Synergy: Foster collaboration between Accounts Payable and the wider finance community, such as the General Ledger and Treasury teams. This collaboration enhances visibility into financial data and ensures accurate cash flow management.
Strengthening Relationships with External Stakeholders

· Supplier Engagement: Engage with suppliers beyond payment-related matters. Building strong relationships can lead to more flexible payment terms, early payment discounts, and a steady supply of goods and services.

· Clear Communication: Maintain an open line of communication with suppliers to address payment concerns promptly. Being transparent about payment timelines and any potential delays fosters trust and reliability.

Breaking Down Silos – The Way Forward

1. Cross-Departmental Meetings: Organise regular meetings involving representatives from different departments, including Accounts Payable. Encourage discussion on challenges and opportunities to promote a culture of collaboration.

2. Technology and Integration: Invest in integrated financial systems that connect Accounts Payable with other departments. Shared access to data ensures real-time information exchange and reduces duplication of efforts.

3. Training and Skill Development: Offer training programs to Accounts Payable teams, enabling them to understand the broader financial landscape. This empowers them to contribute meaningfully in cross-functional discussions.

By breaking down the silo mentality and actively engaging with key stakeholders, Accounts Payable can become a strategic player within the organisation. A collaborative approach not only enhances financial processes but also strengthens relationships with suppliers and fosters a more unified and efficient finance community.

Let’s embrace this change together and pave the way for a more interconnected and successful organization.

Innovation and empowerment are at the heart of the Accounts Payable Association, and we are excited to introduce you to the newest addition to our vibrant team – Kat Moy. Our Association is taking a bold leap forward in enhancing your educational experience and sharing best practice with Kat to lead the charge!

At the Accounts Payable Association, we don’t just set standards; we redefine them. Our commitment to providing our members with the finest education and resources is unwavering, and Kat is the catalyst to take us to even greater heights.

With a distinguished 15 years as an Accounts Payable Manager, Kat is poised to transform how you learn, grow, and succeed. Her passion for finance, leadership and accounts payable is contagious, and we’re confident that her drive will invigorate our profession.

“I’m thrilled to join the Accounts Payable Association as your Head of Education. Together, we’ll embark on an exciting journey to redefine the future of learning in the Accounts Payable profession.” – Kat Moy – Head of Education

Under Kat’s leadership, prepare to be inspired by a wave of innovative education resources, immersive webinars, transformative workshops, prestigious qualifications, and exclusive networking opportunities. We are dedicated to providing you with the tools to excel in the Accounts Payable profession.

The APA Awards Gala Dinner 2023 is a night we will never forget. Accounts Payable professionals from across the country turned up in style, walking the red carpet to our first-ever industry gala dinner, ready to celebrate the tremendous successes of the best and brightest within the industry.

The audience were wowed with a ‘magical’ performance by magician Tom Wright, before a show stopping number and entrance from our presenter for the evening, ITV weatherman, Des Coleman.

For an industry who’s hard-work, grit and determination is often overlooked, the evening provided an opportunity to share and shine a light on our passion, progression and professionalism. We would like to thank everyone who joined us for a fabulous evening, which saw 12 Award Winners take home the top prizes, and a few surprise special recognitions for our industry Superstars!

APA Award 2023 Winners:

Have you ever wondered if your accounts payable processes are prepared for a recession?

Nothing is certain about the UK economy at present, but with the Bank of England warning of a recession looming, businesses need to be prepared.

When there’s uncertainty in the economy, business owners need to take stock of their assets and control whatever they can to weather the impending storm.

This means ensuring your AP processes are efficient. Streamline your internal operations, so everything will run as smoothly as possible under challenging circumstances. Accounts payable is a good place to start when you’re assessing your company and preparing to tighten your belt financially.

Managing accounts payable during a recession

One thing you must avoid during an economic crisis is disruptions in your supply chain. Businesses all over the UK will be doing their best to attract and retain customers who are strapped for cash and facing their own challenges.

Even when your own income may have dipped, the timing of payments to suppliers remains fundamental to running your business. Cashflow issues shouldn’t mean you are keeping a vendor waiting for payment.

Managing your accounts payable system efficiently means discovering the right balance when it comes to paying invoices and keeping your business well-stocked. You must have transparent communication with suppliers and a complete understanding of cash flow.

You also need the ability to streamline and improve AP processes that aren’t working, rather than settling into a familiar routine with potential blips. Turning a blind eye to issues because you feel you have enough to deal with already isn’t the way forward.

Your accounts payable processes will fuel your business and help you to move forward in a time of great economic uncertainty. Get it right now and it will become a key driving force to surviving the recession.

Understand cash flow

Get a complete view of your business’s cash flow by first focusing on the basics. Run a fresh projection on your estimated income and expenditure. Estimating how much cash you expect to flow in and out of your company during the changing economic climate is the first thing you should do.

Consider the size, sustainability and general health of your business. Consider whether there are any possibilities for growth, or whether it will be a case of survival, rather than expansion.

A new projection might bring about small, but vital, changes in your operations. It may lead you to revisit your strategic plans and adjust your approach accordingly to take into account a potential recession looming.

Using the appropriate accounting software can help business leaders to keep on top of cash flow by having accurate and timely information at their fingertips.

Surveys have revealed almost 70% of employees believe their company CEO has made important decisions based on information that isn’t accurate and up-to-date. This is a shocking number at any time, but in particular during a period when the nation is suffering an economic downturn.

During times of great turmoil, having an accurate, complete picture of your business’s cash flow is crucial to forecast and plan effectively.

Clear and proactive communication

Communication and relationships are vital to the success of any company, whether there is a recession or not. When you’re making changes and revenue is at risk, communicating in a clear and transparent way with your suppliers and contractors is the key to maintaining good relationships.

This is where accounts payable comes in, as keeping your finances up-to-date and estimating where there will be a potential rough patch will eliminate any nasty surprises.

The better your line of sight to AP processes, the more chance you have of keeping things on track internally. This will help keep your good relationship with partners and suppliers on track too.

Being proactive means communicating any economic changes that result in a change in your priorities or strategies to your suppliers right away. You must be open and transparent at all times, including communicating any changes to all stakeholders.

Be more accurate

While it’s natural for everyone to feel nervous during a recession, including your suppliers and partners, having accurate information about the state of your finances is vital. If you’re still working on a manual accounts payable system, your processes will be slower and there will be a greater chance of human error sneaking in along the way.

When there is a recession, you may be short-staffed in general, but won’t be able to take on any more staff due to financial constraints.

Any tedious manual approval processes will add additional work to already overstretched employees, at a time when they’re probably struggling with extra responsibilities to combat a shortfall in resources.

This can result in extra stress on your financial team in the accounts payable department. Any processing delays will also cause more stress for your suppliers and partners when manual processes cause delays in payments.

Having a streamlined and efficient automated AP system can eliminate delays and reduce stress for everyone.

Make savings where possible

When you process invoices manually, it tends to be more expensive in terms of employee hours worked. Research by Levvel Research has revealed the cost of manual processing is, on average, around £13 per invoice.

This covers the cost of labour throughout the whole process. It doesn’t take into account the potential for mistakes and the possibility some work may have to be done again due to human error. It also doesn’t cover the time spent on reconciliation.

Keeping a lid on costs is vital in today’s climate and processing invoices manually isn’t the most cost-effective way of running a business. Surprisingly, despite manual AP processes making less sense today, a staggering 86% of small businesses say they still have some manual processing elements to their accounts.

While we’re heading towards particularly challenging times today, if you take a proactive stance now and look at your accounts payable processes, you will have a better chance of easing the uncertainty and setting yourself on the right road to survive.

Businesses are facing huge challenges as a result of the troubled economy. Inflation has reached a 41-year high of 11.1% and the Bank of England is warning of a long recession looming.

As a result, businesses are increasingly automating their accounts payable process to increase efficiency going into 2023. Surveys have revealed CEOs’ main goals are digitisation, growth and efficiency. All three are directly connected in post-pandemic Britain as businesses streamline processes to utilise limited resources most effectively.

The current economic climate, combined with businesses still dealing with the impact of Covid, has led to the adoption of digital technologies speeding up by at least three years, according to research.

Read on to find out about the top accounts payable trends for 2023 that are aimed at preparing your AP team for survival in the mid-term and success in the longer term.

1. Paperless processing

In an era where digital transformation has been rapid, businesses are set to further replace time-consuming manual activities and paper documents with electronic accounts payable processes. Around 50% of organisations surveyed are already using Optical Character Recognition technology to read documents in the processing queue.

In addition, more than half of respondents are using an electronic invoice matching system to support AP processes. Only 15% of businesses are using artificial intelligence-based cognitive automation and 36% use rules-based robotic process automation on data-related tasks.

The indications are these numbers will increase in 2023, which is good news for the 50% of organisations that are still “pen-pushing” in the accounts department.

2. Changes in productivity and costs

The significant increase in process efficiency in accounts payable suggests the general cost of operations will be driven down in 2023. However, on a more cautious note, these savings are likely to be offset by rising labour costs and a general shortage of talent.

Digital accounts payable technology has become more affordable and accessible for companies of all sizes in recent years. Studies into invoice processing efficiency between 2019 and 2022 reveal that productivity has increased by an average of 7% during the past three years.

The data shows organisations across the board have become more efficient and productive since 2019. This is “almost certainly” down to the digital transformation, according to analysts.

The impact has been greater in low and medium-performing organisations. Processing efficiency increased by 28.6% and 16.6% respectively in these performer levels. This is because typically, these organisations use fewer employees to carry out the related transactional activity.

3. Impact of the “Great Resignation”

The impact of the “Great Resignation” will continue to be felt in AP departments. It describes an economic phenomenon whereby employees are considering quitting their job.

It began early in 2021, in the immediate aftermath of the Covid-19 pandemic and lockdowns. Significant social and economic changes impacted people all over the world and thousands decided it was a good time for a career change. The main reasons included salary stagnation and the rising cost of living.

The latest figures show 40% of workers are considering resigning from their jobs. An increase in labour costs is being driven by the talent shortages and employee retention problems that have prevailed recently.

The Great Resignation has specifically impacted accounts payable costs, where salaries have increased by 20% for a senior AP clerk between 2019 and 2022 as companies strive to attract the best talent. Companies trying to get a handle on costs during the anticipated recession will be looking towards more automation to try and save money.

4. Better forward planning

Accounts Payable has already seen tremendous changes since 2019 in terms of costs, but because it is a key process for every business, it must work effectively. People tend not to notice AP when it’s working well, but if it stops working, they will certainly notice the difference and everyone will know about it.

According to research, only around 30% of digital transformations in the accounts payable department are completely successful. This is because many organisations are rushing into it without having formulated a clear idea of how it will work.

Those taking the plunge in 2023 must make sure they have the correct processes in place to make it work efficiently, saving the business money and making it more sustainable. Those who miss the mark may experience a negative impact until they get it right.

5. More businesses will be outsourcing

Research suggests there will be an increase in accounts payable outsourcing in 2023. Many successful financial organisations have started outsourcing as part of their operating model.

The Deloitte CFO Signals survey reveals 34% of finance executives have indicated they are likely to increase outsourcing over the next 12 months in their day-to-day operations.

A top outsourcing firm will do accounts payable transactions for a living. They can do more than just perform the tasks and provide the talent. They are also experts at optimising processes to ensure the highest levels of efficiency and productivity.

They are the experts in implementing digital technology, removing the risks from these initiatives. If you have outsourced your AP activities to a professional consultancy, they should guarantee the outcomes when it comes to the delivery of your expected cost savings and ROI.

When you achieve better results for your transactional activities through outsourcing, this should lower your costs and improve your operational efficiency. It will enable you to focus on the key digital transformation projects that are the core of your business.

The idea is to allocate the resources previously swallowed up in administrative tasks into other parts of the business. By working with a professional AP provider, you can also overcome challenges such as different time zones and geographic proximity, language barriers and communication challenges.

Conclusion

The Great Resignation and the digital transformation will continue to impact the world as we know it during 2023. Forward-thinking finance executives will overcome these challenges by incorporating digitisation and outsourcing into their operating model to solve talent shortages and labour costs.

Once you have improved operational performance and productivity, this will enable you to start working on the goals of growth, further digitisation and efficiency.

Accounts payable is an essential component of any small business’s accounting processes. Your business’s accounts payable department maintains a record of all the money you owe to suppliers and other creditors. A well-functioning accounts payable department will help you ensure that you pay any money you owe to other individuals or businesses as promptly as possible and in line with any payment arrangements, you might have with individual creditors.

For many small businesses, the accounts receivable department consists of a single person for whom accounting might be just one of several duties they perform. However, it’s never too early to start thinking about how your business will manage its accounts receivable. One person might be enough while your business is relatively small, but as it grows, so will your needs. By getting all your accounts receivable processes and policies in order now, you can save yourself a lot of trouble further down the line when you have more to manage. The tips below are all geared toward small businesses, but they will prove invaluable throughout your company’s growth journey.

1. Start automating

As a small business with relatively few accounts to keep track of, forking out cash for accounting software might seem like an unnecessary expense. However, even if you are doing just fine without it, there are still a couple of reasons it’s worth the cost.

First and foremost, if you pick the right software now, you can end up with something that will stay with your business as it grows and serve you well long into the future. Most business accounting software today is available on a subscription basis and provided as a cloud-based SaaS. That means you can adjust your subscription as your business grows, adding new features and capabilities on an opt-in basis. It’s hard to overstate the value of this continuity and the potential long-term savings you could enjoy as a result.

Aside from the benefits of continuity, automated systems are more efficient and less error-prone than humans. Even a small mistake in your accounts receivable department can have big ramifications if it means that you’re late paying a supplier or, worse, you submit inaccurate data when you file your taxes. It’s easy to overlook the possibility of financial and other repercussions of errors that your staff make when they aren’t making any. Unfortunately, no one is perfect; someone in your accounts receivable team will make an error eventually. As the volume of invoices they have to process increases, so do the chances of human error rearing its ugly head. Introducing automated accounts payable processes now means you can keep your lifetime error rate as low as possible.

Finally, using software automation to manage your accounts payable will free up your staff and enable them to use their time more efficiently. Your entire business will benefit from the inevitable increases in productivity that will result.

2. Transition to a paperless workflow

Going paperless isn’t just about saving trees, although that is a fortunate side effect. Every paper invoice you process is costing you time and money, removing them from the equation will save both. Digital invoices are much quicker and easier to process, and they will help you get the maximum possible benefit from your new automated systems. Like automation, a paperless approach to your accounts payable processes will minimise or eliminate unnecessary work for your staff.

Not only is a digitised workflow more reliable and efficient, but it also means you can get rid of bulky filing cabinets and use other storage space more effectively. As your business grows, finding space for all the documents you need to retain for your records can present a serious logistical challenge.

3. Establish a regular auditing schedule

Using an automated digital workflow to process your accounts payable will go a long way to minimising the potential for errors, but no system is perfect. Remember, even a seemingly small mistake in your accounts payable can have much larger ramifications when it comes to your financial reporting, not to mention your day-to-day planning. One of the reasons accounts payable is so important is because it lets you see how much cash you have available to spend after you account for the portion of it you owe to your creditors. Errors in your accounts payable can give you a false picture of your current cash flow. It’s also important to spot errors as early as possible so you can determine whether they are a one-off occurrence or the result of improperly configured software.

Ideally, your workflow should include safeguards that prevent simple errors, like numbers being input incorrectly by a person. Good accounting software can alert you to any potentially fraudulent invoices and flag up anything suspicious for a manual review. However, these systems are designed to identify fraud; they won’t help you catch accidental errors.

Fortunately, while your business is still relatively small, it should be fairly simple to carry out regular account reconciliations, along with a more detailed annual audit. Many small business owners think this kind of accounting work is something for larger businesses with dedicated accounting teams. However, while a detailed audit of your company accounts might require a professional accountant, ensuring that your accounts payable are accurate is something that most business owners should be able to handle themselves. Most accounting software will include features designed to make it easier for you to do day-to-day auditing and reconciliation on your own so you can maintain an accurate picture of your current cash flow.

4. Prepare your team for growth

Even the healthiest and most successful small business will collapse under its own weight if it tries to expand too fast. The accounting processes and workflows that work just fine for small businesses won’t necessarily hold when the volume of trade is much higher. If you think your business is growing at a steady rate and an expansion in the near to mid-term looks likely, you should prepare your accounts payable team accordingly.

The Accounts Payable Association offers a range of courses and certifications that can not only provide your staff with the training they need to operate in line with prevailing industry best practices, but also enable your business to signal to future creditors that you take accounts payable seriously. Whether you’re approaching a new supplier or an investor, APA certification signals that yours is a business that stays on top of its accounts and settles debts reliably.