How to Use the Accounts Payable Process to Gain Competitive Advantage

Traditionally, companies haven’t emphasised effective management of accounts payable. However, recognising its significance, the article stresses elevating it as a top management priority. It discusses the importance of the often-underestimated accounts payable process in today’s business and offers insights on making it a strategic priority. The article also outlines how to leverage invoice processing as a competitive advantage in the back-office function.

Common Risks of Not Having an Efficient Process in Place

Without an efficient accounts payable process, there’s a risk of late payments, duplicate payments, and missing cash discounts. This may harm vendor relationships, leading to poorer service and deliveries, impacting the organisation’s offerings to customers.

Current Challenges in Managing Accounts Payable

Common approaches to efficient accounts payable management involve delaying payments to enhance free cash flow and reducing the cost per invoice through strategies like offshoring and outsourcing.
Below, we discuss what makes these approaches risky.

Over-optimising invoice processing causes more problems than benefits

Attempting to swiftly and cost-effectively pay numerous invoices, often through outsourcing and offshoring, poses risks. It can lead to a chaotic situation, impacting the company negatively with overdue payments, duplicates, fragmented and insufficient payments, missed discounts, and unmatched purchase orders (POs). Prioritising accuracy in accounts payable is crucial, and it’s not worth risking for the sake of quick invoice processing.

The lack of data-based insights into the accounts payable process causes time-consuming detective work

Addressing issues in over-optimised invoice processing becomes challenging without accessible and understandable accounts payable data. Detecting delays, identifying PO-lacking payments, or locating duplicates requires extensive detective work. Having a defined process and access to clear real-time data about your AP process is crucial to making these tasks possible and less time-consuming.

Stricter consumer protection acts can lead to significant penalties when failing to pay invoices on time

Be cautious if delaying payments is your strategy to maximise free cash flow, as fines can be significant for mishandling invoices. For instance, under France’s Consumer Protection Act of 2015 (Act Hamon), companies may face a fine of €375,000 for delayed payments, doubling for repeated breaches within 2 years.

“If you’re struggling to prioritise accounts payable, consider asking others if paying suppliers on time is preferable to a €750,000 penalty.”

Automating the accounts payable without end-to-end process transparency

You’ve likely heard that automating your accounts payable process solves all AP issues, boosting efficiency and reducing human errors. While automating error-prone manual steps is wise, blindly automating without understanding the end-to-end process leads to efficient mistakes. It’s smarter to analyse your process based on data first and then automate the most profitable parts.

Transform Your Accounts Payable into a Strategic Asset Using Process Mining Technology

Integrating intelligent process mining technology into your accounts payable process can turn it into a strategic asset. Process mining utilises otherwise overlooked AP data to understand processes, maximise cash discounts, identify overdue payments, address invoices without purchase orders, and pinpoint process issues. Simultaneously, it enables automated reporting, boosting AP automation and three-way matching rates, reducing manual correction time.

QPR ProcessAnalyzer, an AI-driven process mining tool, helped a large European bank shift focus to improve the automation rate of existing initiatives. In two months, their zero-touch rate increased from 5% to 40%, resulting in €2.6 million in cost savings.

Process mining helps you:
  • understand your process
  • collect cash discounts
  • identify overdue payments
  • spot invoices without purchase orders
  • understand what caused problems in your process (i.e., root causes)
  • improve your automation rate
  • increase the three-way matching rate
  • show vendors that you are a reliable partner
  • have automatic reporting instead of spending days building reports
  • benchmark the average duration of invoice payments internally
Real-life benefits gained from process mining – driving productivity and cutting costs

Metsä Board reduced the number of invoice corrections by 80 %

Piraeus Bank reduced process lead times by 86 %

A large European bank increased its zero-touch automation rate from 5 % to 40 %, which resulted in € 2.6 million in cost savings.

Process mining is your ally at every step, ensuring efficient and strategic management of your accounts payable process. Ready to unlock hidden value in your AP process?

Watch a quick 2-minute demo on improving the Accounts Payable process using process mining software.

Get a quick overview so you can spend your time improving your processes.

You can easily define and set up processes according to your own needs using a convenient layout tool. In addition, since all types of workflow processes can be managed, you get all case management in one single system. 

Analyses, statistics and reports give you an unbeatable overview with real-time status and division of responsibility. Nothing has to fall through the cracks anymore and you always have an accurate and up-to-date base for decision-making.

CANEA Process is a tool that allows you to model and share business processes in an easy-to-use graphical web interface.

Seeing is understanding

Visualisation gives all employees an understanding of the organisation’s processes, activities, responsibilities and information flows.

Living processes

Identifying working methods while making it easy to update is the basis for continuous improvement of processes.

Create a complete picture

Linking together documents, information and tools with clickable process maps create an intuitive and comprehensive management system.

CANEA Workflow is an IT solution that automates, quality-assures and speeds up administrative workflow processes.

You can easily define and set up processes according to your own needs using a convenient layout tool. In addition, since all types of workflow processes can be managed, you get all case management in one single system. 

Analyses, statistics and reports give you an unbeatable overview with real-time status and division of responsibility. Nothing has to fall through the cracks anymore and you always have an accurate and up-to-date base for decision-making.

By creating executable processes in CANEA Workflow, you get both better control of the situation and smoother processing.

Streamlining the work

Ensure compliance and that handovers are done correctly and with the right information.

Correct decision support

You get an unbeatable overview of the processes in real time, with both clear reports and clear diagrams.

Improve processes continuously

Our process support can be constantly adapted to changing needs and requirements. In this way, we give you the best possible conditions for your daily work.

A document management system without complicated folder structures.

CANEA Document combines simple and intuitive search features with powerful features for managing documents from a life cycle perspective.

Maximum availability
Search and find information quickly based on what you need, not where it is stored.

High security
Ensure accuracy, changes and access to all information – with high traceability.

Fulfils requirements
Manage information according to standards, legislation and other requirements for document management.

CANEA Document supports everything from production, publication and modification to archiving and deletion – with full traceability and version management.

CANEA Document provides secure management of all types of documents – in one place. Tagging the information with metadata creates a virtual, multidimensional folder structure. This means that a document appears in multiple locations at the same time, with authorisation-controlled access. The right information in the right place for the right users at the right time!

You can usefully add your company’s process-oriented management system to CANEA Document. All production and distribution of documents is quality-assured and streamlined. In addition, your employees always have access to the most up-to-date version of the documents – directly via intranet, tablets and mobile phones.

Improve the performance of your project activities

CANEA Project is a comprehensive project tool with integrated support for all types of projects and parties– such as management, resource owners, clients, project managers and project participants. CANEA Project gives you an excellent overview of your entire project portfolio, including profitability and status, making it easier to prioritize and make decisions.

CANEA Project shares all important project information with both internal and external members.

Let your project manager focus on management rather than administration and distribution of the information.

Gather all project information in one place and make it available to both internal and external members.

Helps you with prioritization of projects, resource management and analysis of portfolios and programs.

Make reality of the strategy

CANEA Strategy makes it possible for organisations of all sizes to create a unique common thread from the strategic work to the daily operations. We do not just provide performance management tools but rather a completely new generation of IT support for strategy activation. The system guarantees and provides support throughout the chain from strategy to execution. You get no results without action. CANEA Strategy makes it possible in practise! 

CANEA Strategy ensures and provides support throughout the entire journey from strategy to execution.

Create a shared understanding of the strategy, the goal to achieve and how.

Gives management an unbeatable overview of what’s happening, how it’s progressing, and why.

Creates a clear common thread from the strategy to project, initiatives and actions.