Why New And Improved AP Processes Are Vital For Your Organisation


A man picking up boxes representing why new ap processes are vital


Many AP departments struggle with remaining fully functional and efficient in a changing environment. The most disrupting factors AP departments have been exposed to recently are the adoption of remote working practices and rising levels of digitalisation and automation.


In many cases, failure to fully adapt to these changes has exposed the shortcomings of internal processes. However, this can be seen as an opportunity to implement mature processes that contribute to the smooth functioning of an AP department and of the entire organisation.

In this article, we explain how new and improved AP processes can help your department to better meet internal and organisational goals.

The Problem With Outdated AP Process

Process maturity is the key characteristic of best-in-class performers, and is also linked to operational excellence.

At the other end of the scale, we have departments marked by outdated and inefficient processes, which are usually the result of fragmented and disconnected systems and/or policies. High levels of fragmentation typically lead to inconsistencies in processing times and costly errors, such as incorrect data entry, double payments, or matching errors, all of which have an impact on reputation, cash flow, and profit margins.

How Technology Can Help Improve AP Processes

Automation technologies have brought important transformations to the way many industries work. It is estimated that approximately 77% of AP departments have already implemented some level of automation in their everyday operations. There are two potential issues stemming from this:

1. Partial AP automation can help improve invoice processing, data capture, invoice matching, and other core processes, but it’s still a long way from the improvements brought about by end-to-end automation. Partial automation doesn’t eliminate inconsistencies, since manual processes are still part of day-to-day operations.

2. Current trends suggest that so-called ‘hyper-automation’ is the way to go for many industries. According to research group Gartner, the hyper-automation software market is expected to reach a global worth of nearly US $600bn. Its size suggests that hyper-automation is no longer optional when it comes to operational efficiency, especially in a post-Covid scenario. In fact, Gartner estimates that next-level technologies can reduce operational costs by 30%, saving organisations both time and money.

Putting AP Processes First

The above strongly suggests that any department that still relies on partial automation is likely to struggle accomplishing goals and efficiency targets. Yet, and despite the importance of end-to-end automation in AP, it’s essential that internal processes are improved prior to automation.

Technology per se can’t solve operational problems, unless processes are revised and updated in order to make them more solid, but it can supercharge the operational efficiency of AP departments that consistently work towards process maturity.

AP process improvement is a multi-faceted task, which at the very least should focus on:

a. Defining and tracking critical metrics.
b. Making changes that preserve strategic alignment with other departments, such as finance or procurement.
c. Breaking processes into steps and implementing a chain of accountability, based on each team member’s skills and job responsibilities.
d. Ensure staff are supported through the process of change by providing adequate training.

Next Steps – Discover The Benefits Of AP Automation In Your Department

When an AP department improves its technology and processes, this has a knock-on effect and benefits other areas of the company. New and updated AP processes can strengthen a company’s working capital, help it adapt to a digital-first world, and enable beneficial changes for your AP department and for your organisation. Please call one of our AP specialists today on 01536 266 585 to find out more.

SAP Invoice Automation Guide - Cogent Consulting