Just as meteorologists measure visibility to determine which tools will light the way through torrential downpours, businesses utilize tools to better view key performance indicators (KPIs) and other metrics through the fog of raw data.
But it doesn’t always work. The nearly 200 AP and finance executives, leaders, and professionals surveyed in Ardent Partners’ State of ePayments 2018 reported a “lack of visibility into invoice and payment data” as a frequent challenge faced by today’s AP teams.
Unfortunately, few professionals have sufficiently addressed this challenge, despite the available technological solutions. According to the Institute of Finance & Management (IOFM)’s report Visibility into the Accounts Payable Process, AP professionals aren’t proactively investigating cloud-based solutions that can increase their visibility and inform their payment strategy decisions to give their organizations a competitive edge.
The IOFM report states that a majority of AP professionals say it’s crucial to track secure-payment metrics that help them monitor instances of potential fraud.
The survey also claims that 66 percent of respondents track KPIs by using outdated apps like Excel, and that more than 25 percent rely on analog methods like whiteboards, checklists, and email trails. None of those methods can track the security-oriented statistics that the respondents deemed so important. On the other hand, solutions like automated payments feature customizable dashboard tools that clearly display layers of crucial metrics at a glance.
Along with these security priorities, the report notes that almost 42 percent of professionals value revenue stats such as the number of early payment discounts they’re able to capture.
But in real life, the currently few who do use dashboards seem to limit their priorities to only the basics in AP performance, and underuse the dashboard’s full informational capabilities. More than half of those professionals use the dashboards to track items like the total number of invoices processed, number of invoices paid on time, and number of invoices processed per full-time employee.
Although they’re important, those basic process metrics offer pretty limited dimension when thinking through and executing strategy. Properly configured dashboards that accompany an automated payment solution offer a huge array of dynamic factors in AP. These can include the amount of:
…and many others.
On another level, it’s not just the AP side that benefits from the more robust purview that AP solutions provide. When you pay suppliers electronically, they get better visibility into their receivables, which enables them to plan their capital management. In turn, payer organizations can leverage this capability that they give to their suppliers in order to negotiate for better payment terms.
Although the IOFM survey reported reasons for reluctance to adopt “cloud-based technology” in general instead of specifying AP solutions per se, the results still offer insights. Over a third claimed that higher-priority projects prevented them from implementing cloud-based technology, while a quarter blamed budgetary constraints, and over 21 percent cited a lack of IT support and resources. These answers reveal that many organizations are simply unaware that most cloud-based solutions and SaaS products are “pay as you go” and easy to implement without much interaction from their IT departments.
AP departments face the constant challenge of keeping up with the digital developments that can enable their success, including adopting tools that increase their visibility into their own processes. As technology keeps evolving, so does access to strategic data that can save organizations time and money.
Dashboards have become the tool of choice for some organizations to improve visibility into their AP, and determine whether they’re staying competitive or lagging behind.
AP teams have a choice. They can adopt innovative solutions that enable better visibility and result in stronger cash management and more strategic decisions. Or they can stand inside a data fog, and watch while other organizations use their comprehensive tools to get ahead.