When we talk to clients and prospective customers about achieving AP automation and the many benefits that come with it, we’ve long tended to focus on what they need to do in order to be successful.
A lot of folks in AP want to know what makes a program successful. To me, knowing the goal, the vision, and the outcome you are looking to achieve is critical to creating that success. Leaders need to be open-minded and not look at solving just one pain point but evolving entire processes to realize those better outcomes.
At least at a high level, you likely know your ideal accounts payable roadmap. It probably includes:
- adding new payment types
- reducing time to approval and effectively measuring days payable outstanding (DPO)
- digitizing any remaining paper processes and the manual inputs that fuel those; and
- maximizing ERP investment
Not all of these can happen in-house, and so selecting a good partner becomes imperative.
The reality is that every organization of any size relies heavily on internal and external business partners, ranging from internal procurement teams to external AP solution providers. Balancing the strengths and needs of business partners with the ideal solution is important.
I’ve been on both sides of this conversation many, many times, and find that you need to be as confident in your partners’ growth roadmaps as your own. Especially when talking about selecting a solution to automate and secure the AP function. You want someone who can grow with your business and be as nimble as needed. Everyone is selling something, but are they selling a product or an entire concept, and do they understand the context you’re operating in?
For every product and solution, there is a what, a how and a why. The why is the most important question to answer, and it’s critical to know why potential partners do what they do, because it informs the what and how of what they do.
We partner with Ardent Partners and Strategic Treasurer every year to look at the state of finance, payments and fraud. The research shows that AP needs continue to evolve rapidly. In a year that looked like 2020, there are changes to workflows and protections that need to happen, but even in quieter years, an entire business might find itself facing rapid growth they aren’t set up and scaled for.
Maybe the single most important question is not whether an AP automation solution partner can accommodate today’s payment flows, but what happens if new payment types are added or there is a change to an existing ERP. After all, you’re not investing in an AP automation solution just to solve today’s problems but tomorrow’s as well.
It’s not just about your partner, though. It’s also about what the solution will enable you to do for your suppliers.
Don’t forget suppliers
Let’s pull the scope out a little further here. To the extent that the who needs to be addressed when it comes to new solutions, there needs to be a sharper focus not just on a chosen provider but also on your supplier community.
Whatever AP changes are made, they need to involve suppliers because, without their buy-in, the best-laid plans are going to fail. You need to ask if their needs are being accommodated because suppliers increasingly have equal clout in the trading dynamics.
Start by recognizing that a single payment type or solution is no longer an option. Suppliers have also realized that a check in the mail isn’t necessarily the most cost-effective or speedy choice. Challenge your team to take a closer look at industry trends and prize organizational honesty, making sure you know your community well enough to prioritize its needs. Hypothetically, if you’re talking about a large pool of manufacturers operating with a 1% margin, transforming the way you pay them may have a significant impact on their business for better or for worse, one that may need explaining.
the Bottomline: what I’m making the case for is transforming the decision-making tree, because we’re in the days of a more thoughtful process. With so many providers and technology that are catching up to the need, it’s time to challenge yourself, your suppliers, and solutions partners to look to the future and develop a real roadmap for growth. It’s the rare situation where everyone truly can—and should—win.
For further insight into the payments and banking industries, subscribe now and stay up-to-date on the latest tips, trends, and topics. You can also check out The Payments Podcast, where experts engage each other on the real-world factors impacting your industry.