Guest Blog: How AP’s Exciting Future Will Unfold

There’s no denying that AP has evolved enormously over the last couple of decade: even the once-revolutionary electronic invoicing is common place nowadays and out-shone by the promise of robotics and cognitive technologies that can fully automate much of the processes central to AP organizations. 

An even more impressive evolution has been in the organisational role of AP. These days, AP is a strategic function in its own right, deploying an impressive variety of payment options and compliance controls to deliver powerful and sophisticated cash management strategies through techniques such as dynamic discounting. 

But what of the future? Where does AP go next? What technologies and corporate mandates will characterise the AP organisations of the future?

As 2018 beckons, we can already see the broad outlines of the more immediate changes. P2P integration will become even tighter, with procurement and AP functions working even more closely together. In a drive to move AP into a profit center, AP departments will increasingly partner with businesses’ treasury, audit, and finance functions. 

Organizations are launching new global compliance frameworks and controls in a bid to protect against duplicate payments and fraud, as well as focusing on improved process monitoring and metrics. Research by APEX Analytix shows that compliance and controls are a top priority for leading P2P organizations this year, and with the area becoming increasingly more sophisticated thanks to advances in analytics and artificial intelligence (AI), this is likely to remain the case for years to come. 

 1. Financial Leaders’ Global 2000 Survey, Florida, February 2017

Supplier portals will become far more extensive, driving fuller supplier disclosure and compliance, as well as leveraging portals’ self-serve capabilities to enhance productivity. In the past 2 years, investing in portals and supplier information management has been a number one priority for financial leaders. More and more teams are launching, enhancing or expanding their portals and cleaning up their vendor masters. As portal technology continues to improve, we can expect SIM to be increasingly indispensable. 

2. Financial Leaders’ Global 2000 Survey, Florida, February 2017

Looking further ahead, we can see even more fundamental changes to AP. Changes that affect not just how effectively AP works, but also its very mission.

Touchless processing of invoices, for example, is already reality today—but the touchless processing of tomorrow will embrace more than routine invoices and small-sum payments. Leveraging advanced technology and AI, smart automation will extend right across the range of AP activities, bringing about significant productivity gains, as well as far more effective controls and compliance.

Nor is this hyperbole: AI-enhanced applications are already either on the drawing board, or indeed being delivered. Even so, the AI-enabled AP applications of 2018 will undoubtedly seem crude compared to those deployed by best-in-class AP organisations ten years later.

Blockchain ‘distributed ledger’ technology, too, has the potential to completely transform AP. A couple of years ago, that might have been imagined to have been in the form of making payments in so-called bitcoins—which are still blockchain technology’s most widely-known application. But no: instead, it is the underlying distributed ledger technology itself that is attracting attention.

How so? Because within the blockchain ledger is held both sides of a commercial transaction—in effect, the initial order, the shipping note, the goods received note, and the subsequent invoice, thereby negating the need for many of today’s document exchange, matching, and validation processes. What’s more, held on multiple computers as a huge distributed database, a blockchain ledger is both secure and immutable: falsification is impossible, because of the impossibility of changing every distributed record and its hash-encoding at the same time.

Just this summer, a joint project carried out by two commercial providers and scientists at the University of Copenhagen connected a supplier, shipper, load point, customs, and freight terminal on a shared blockchain ledger, building a fully-working proof-of-concept.

Granted, AP’s blockchain-leveraged future is still some way distant. More distant, to be sure, than AI-enabled smart automation. But once adoption begins, the rollout could be rapid: the business benefits, and the use case, are too compelling to be ignored.

 
So how, then, to prepare for—and engage with—AP’s exciting future?

First, be open to it, and look for ways to take advantage of this future as it unfolds. Change is always easier if the use case and financial benefits are clear.

Second, keep up to date with these new technologies as they emerge: don’t be like the generation of managers who failed to understand the importance of ERP systems, and who were subsequently rapidly sidelined.

And third, stay close to your AP service providers—it is in their thought leadership materials and at their user conferences that the future will start to unfold.

For more information on APEX Analytix visit https://sharespace.digital/supplier/apex-analytix

Phil Beane is the SVP of Global Field Operations at APEX Analytix, leading commercial and retail audit teams and international operations. As the world’s leading provider of supplier portal software and AP recovery audit services, APEX Analytix has been at the forefront of AP technology for over 20 years, working to safeguard over £2.1 trillion. Their SmartVM database of 20 million + proprietary, scored supplier records was revolutionary, and they continue to move towards the future. The recent release of their cognitive technology, APEX Archimedes, and their Supplier Statements module for statement recovery audit, marks the next steps in APEX Analytix’s audit recovery technology.