Leading is never an easy thing, perhaps now more so than ever.
Decisions, right, wrong, or indifferent are made at increasingly rapid rates, and the backlash to those are visceral, real, and proliferated across all manner of social media...at least in the public light.
What goes on behind closed doors within companies is certainly somewhat murkier, but is one of the things that can make or break a corporate culture. This is just one of the reasons that being a leader (or Manager, though not all managers are leaders I’m sorry to say) comes with a price tag. Basically, you are on the firing line from an executive management perspective if you own a certain process in your organization, and you’re faced with the natural pressures that come from having to achieve certain goals and benchmarks within your subject area. The accounts payable process is no different.
Here, in our humble opinion, are the three biggest problems that Accounts Payable process managers face today!
The lack of tools necessary to transform a process.
Now this is no shock for those who read our accounts payable process improvement posts or anyone who is in tune with leading market research. All told, probably less than 40% of the corporate B2B market has actually done something meaningful about improving their accounts payable process. Why? Because it’s messy, costly, time consuming, challenging, and difficult to prioritize among other competing interests in the corporate landscape (from a cost justification standpoint). Therefore, because fewer Accounts payable process managers have the tools necessary to undertake process transformation, it’s impossible for their respective organizations to realize any of the tangible impacts.
Lack of executive sponsorship as it pertains to process improvement.
Again, executives are hard-pressed for time when it comes to innovating and leading their businesses forward. As such, they tend to focus on top-line initiatives. People’s attention tend to be drawn to the new and exciting, meaning that new products, markets, emerging technologies, and other hopeful areas obfuscate the attention of said executives from looking at internal areas of improvement. In many cases the dollars for the tools to improve a business are allocated to support the top-line growth or innovation initiatives. Sadly, this leads to the detrement of the business of the whole and in a sense leaves the accounts payable process manager (in this case) in the lurch, because they can’t typically exercise the authority required to spearhead an ap process initiative (costs too high, human resources required, sponsorship across the organization is lacking, etc, etc.). If this epitomizes your experience in tendering ap process improvement initiatives, then we have some guidance we’d like to give you that you can access here!
This is broad and may seem generic, but the Accounts Payable process management role is really a thankless one that is perpetually under the gun from outside and inside pressure. Treasury and Finance executives want to know what their payables exposure is at any given time, which is a guess-timation process for most business because that data is generally not available dynamically, and as such most businesses tend to look historically to find their answer, which is not optimal. Vendors increase pressure on AP managers as invoices do, don’t, or need to get paid for a variety of reasons. These dealings can strain relations with procurement personnel as well as departmental approvers who may have to provide say-so before an invoice can be coded, approved, and paid. Finally, there’s AP staff that create pressure. AP staff, in a non-automated environment often have mundane roles due to the nature of what is required to advance an invoice transaction (data entry, manual validation, troubleshooting, etc.). This, along with managing performance standards, leads to a scenario that often has high turnover rates in this specific field of endeavor, therefore, the AP manager is essentially taking heat from all sides.
Many of these issues can be improved or eliminated through an intelligent automation approach as well as by embracing a mindset of total process transformation and value creation. In fact, we’ve seen scenarios where sharp AP Managers and Finance Directors have leveraged a broken accounts payable process turnaround as the poker chip so to speak, which affords them the opportunity to cut their teeth on major process improvement and ultimately career advancement.
We hope you found this post useful and encourage you to continue your education on how to transform a transactional document process and monetize for you and your business!