Automate This Episode #02: The State of ePayables 2019 part 2
Automate This #02: The State of ePayables 2019 part 2
In this episode, Helee Lev, Chief Revenue Officer at Goby, and Ryan Nelson, Chief Operating Officer at Goby, discuss the second half of the Ardent Partners State of ePayables 2019 report. They cover the third and fourth chapters of the report, “Best-In-Class Accounts Payable” and “Strategies for Success”.
Subscribe to Automate This on your favorite podcast provider & never miss an update!
Read the podcast transcript:
HELEE: Welcome to Automate This; the podcast for conversations about accounts payable and beyond. This is episode two where we will finish the second half of the Ardent Report State of ePayables 2019. As a reminder, Ardent puts out an annual report about 40 pages long from surveying 167 AP and financial professionals globally and this is the second part of a two-part podcast where we digested the first two sections last time. And hopefully, you’re back to hear the rest of it because that was so riveting and we’re going to finish up today. As a reminder, I’m Helee Lev, CRO at Goby.
RYAN: And I’m Ryan Nelson, the Chief Operating Officer at Goby.
HELEE: All right, Ryan. Take it away. Where did we leave off last time?
RYAN: Thanks, Helee. We are starting today at chapter three of four. I really like this chapter. It’s called “Chapter Three.” No, it also has another name. Chapter three coined “Best in Class Accounts Payable.” “Best in class” being a term that we use quite regularly around here. I think it really sets someone up for success when you think about what you want to achieve through any sort of automation project or process improvements to just put that best in class target out there. Now, let’s understand per Ardent what that means.
HELEE: And I like to add I mean our customers, it’s attainable you know. To our customers or people who are just afraid to take that first step, best in class is attainable. It doesn’t have to be aspirational. And once you break it down, it’s actually quite simple.
RYAN: And here is in the opening paragraph of chapter three how Ardent describes it. “Best in class AP organizations have blazed the trail for all other groups showing by their example and results what is possible when an AP department operates at full potential. These leaders have been able to transform their operations and maximize the gains achieved on the AP journey.” Another term we like to use quite a bit, the journey. So if best in class sounds quite aspirational to you, the journey. I think we talked about that last time starting with one step or whatever the old saying is on the journey.
HELEE: That’s right. The journey of a thousand miles begins with a single step. And we find customers not only on the first step, but sometimes they’re 50 steps in or 500 or maybe they’re getting quite close to 1,000 and just wanting to know how to take it to the next level. So you know we’re happy to work with people at all phases of their journey.
RYAN: “Taking it to the Next Level,” that is essentially the title of the figure nine here in the report. Key elements required for AP’s performance to reach the next level. I just wanted to read through a couple of these. I thought they were pretty interesting, but the primary thing that people are targeting are “smarter” and it’s in quotes, “smarter” systems that drive more efficiencies. Okay, sure. We’re probably going to have systems involved if you’re going to optimize this business process.
Deeper, more agile analytics; interesting. I like to see that in this report. We do hear that quite a bit especially from the CFO perspective. They are starting to understand that process automation and reduction in time and expense is not the only value of something like this. Deeper, more agile analytics are becoming important. Enhanced collaboration with key stakeholders; another great strategic point and I’m really glad to see that this is recognized as best in class and something towards the end of the journey that you want to achieve working better with treasury, working better with procurement, those types of things.
And then you get into some of the other components, eradication of tactical tasks. I think it’s very interesting that we say eradication. Like get rid of all tactical tasks that humans have to perform.
HELEE: Yeah. And there’s two sides to that especially knowing again and talking to our customers. Part of it certainly is just the time and efficiency saved of you know errors and late fees and human error and the human element, but part of it is also just about growing and developing that AP staff you know. People who just do very clerical manual repetitive tasks that the turnover rate in those positions is really high and employee turnover costs companies a lot of money so it’s kind of a double benefit. You’re retaining talent, you’re repurposing them for the highest and best use of their time so people don’t need to fear AP automation. It’s not like the robots are coming to take their jobs. The robots are coming to streamline tasks that could be done by robots so they could do things that need to be done by a brain.
RYAN: Absolutely agreed. You know what else it takes to get to the next level, Helee?
HELEE: Do tell.
RYAN: Well, I will tell. Executive support. For total AP transformation, you do need executive support. So the approach to that kind of process change does take some support from senior levels in the organization.
HELEE: Yep. And we see that and part of it too, there’s one way to get executives to buy into your plan. Do you know what that is? Showing them the business case. Showing them the ROI for the AP automation journey that you want to embark on. If you go to your executive sponsor and say, “I’d like some money to buy an AP automation software,” the answer is probably going to be like, “Nope. It’s working fine.” If you go to your executive sponsor and you say, “I have digested a business case for you. Here’s your investment in AP automation, here’s your payback. Here’s the time, the value, the months it’s going to take from the time we implement this to when we start seeing value, here’s how much money we’re going to save, here’s my plan to repurpose these people doing manual tasks;” whole different story. And that’s something that we like to help our customers kind of put down on paper to help build the business case for AP automation because it’s there. It’s definitely there. It’s just about quantifying it and putting it on paper and then effectively communicating it to the executive team.
RYAN: Excellent and agreed. So now, you’ve got near complete eradication of tactical tasks, menial tasks. You’ve got predictive analytics for forecasting planning and budgeting. And tell me if you believe this one or not. Perhaps, you have a touchless and holistic AKA straight through processing invoice and payment management approach. So in theory, something comes through from a vendor and says, “You will pay me this” and you pay them this and no human even looked at it. Is that…
HELEE: I don’t know, Ryan.
RYAN: Is that…
HELEE: That’s wild.
RYAN: Can that be done?
HELEE: That’s wild. That’s more aspirational, I think. But AP and the process, the P2P process, is something to continually build upon and improve. So it’s not like you go from zero to 100% automated in six months. It’s something you kind of look at each year. You pick off the low-hanging fruit, you implement best practices, you do AP automation then maybe you tackle payments and other facets, but I don’t know. Touchless all the way through, every single bill, no exceptions, maybe someday, maybe some companies.
RYAN: So the other point to accomplish this which again I like to see we talked about executive support and those types of things, collaboration. So collaboration remains a crucial piece of AP’s ongoing advancement. And again, I like to see these things that really put the AP practitioner on the pedestal that they deserve. The AP function is destined to do great things, but it cannot and should not do it all alone. They talk about the quid pro quo which is a term I actually wasn’t, when I read it, I was like, “Quid pro quo, what does that actually mean?” And then it’s been all over the news of course.
HELEE: We’re not looking to get political on this podcast today, are we?
RYAN: We will not. We will not right now.
HELEE: This is just AP.
RYAN: We can though. There’s no rules.
HELEE: This is clean.
RYAN: This is just conversation, but the quid quo pro talks about you know how to benefit both the AP team, the procurement team as well as any of the stakeholders and how that you know the CPO benefits and all the other stakeholders. So anyway just important to think about engaging stakeholders and what’s in it for them to be able to accomplish what you need from your department.
HELEE: Can the AP department and the procurement department be friends, Ryan? Can they?
RYAN: I believe they can. I believe that an invoice getting through completely touchless is possible and that, what was it? Sourcing or procurement? Procurement and AP can be friends. Okay. So again, best in class AP performance. Ardent Partners defines best in class performance in this report as the 20% of enterprises with the lowest average invoice processing cost and shortest invoice process cycle time. So remember you want to reduce your cost, but you want to be able to move quickly and have short cycle times too. Top-performing enterprises have taken their AP operations to the next level by leveraging technology to streamline the AP process, make it more efficient and enable more strategic activities to be carried out.
HELEE: And I can’t tell you how many folks I talk to that in their current state will say that their biggest pain point is just approvers taking too long. And I sit here on my side of the table saying how is that possible? Just go tell the person not to take 38 days to approve a document, but it’s such a common problem. But the good news is it’s such a fixable problem and automation can help solve some of that. And the other thing that you know continues to make my head explode as I talk to customers is just the general acceptance for, “How much you’re paying in late fees?” “Ah, we’re paying x dollars in late fees.” And I’m like, “And, and does that drive you crazy? Are you upset about it? I’m upset about it and this is the first time I’ve spoken to you.” But they kind of just accept it as business as usual because they don’t have a better way or they just simply can’t process the bills fast enough. So you know bringing those cycle times down and eliminating those late fees, paying the bills quicker, it can be done. That is attainable.
RYAN: Agreed. And I think this is a very exciting. Looking at these metrics in table two here, best in class versus all others. Let’s really talk about how they perform. You mentioned time to process an invoice and that there’s people that take 38 days, no doubt. There are people that of course as soon as they see something in their inbox, they handle it. But if you are an all other so not best in class, it’s going to take you about 11 days to process an invoice. If you’re best in class, it’s under three days so pretty significant.
HELEE: Still meaningful.
HELEE: Still meaningful.
RYAN: Improvement I would think if you’re talking about avoiding late fees, capturing early pay discounts or having good vendor relationships; all that kind of stuff when you’re going from 11 days to three days.
The exception rate, right? And I think the exception rate we would probably agree is where a lot of time is spent. So if you’re talking about resource reduction and the pain and people saying, “Oh, my life because of these exceptions,” you’re going to get that exception rate down from 23% whereas best in class have it at 10%. So at least nine out of ten invoices can flow through your process and not be considered exceptions versus a quarter of them being an exception.
Straight through processing which we debated is even possible. And of course, well I’m talking about the whole hands-off thing. But straight through processing where everything maps properly and the invoice flows through, 65% in best in class and you’re only going to hit 19% of those if you have you know less than best in class or you know kind of the average.
HELEE: And that’s always something I chuckle at, right? If you’re talking about roughly 20% going straight through and 80% exceptions then is that really exceptions?
HELEE: Or your exceptions kind of more your rule and you’ve got some work to do to clean things up over there? And I tend to think the latter.
RYAN: I believe we have an adorable comic about that on Automate This…
HELEE: Yeah, that’s right. Shameless plug for…
RYAN: The cartoon, yeah.
HELEE: Automate This the cartoon. Feel free to pause the podcast, go search for the cartoon then come back.
RYAN: And to see how shameless the plug is, we should check the credit too and see if it’s credit to HL or not.
HELEE: I never envisioned myself to be an AP joke writer you know. Like when I was a little girl like what do you want to do when you grow up? Never crossed my mind, but you know here I am.
RYAN: Well, that’s what excites me is not only is joke writing probably a career choice, but AP can be a career choice again. So when you’re talking about big, cool stuff like technology projects and that for sure.
PO matching; this is I think a big one people understand. It’s a nuisance when you have a high percentage of non-matching POs or a low PO or however you want to say it. If the invoice doesn’t match the PO, you can get to nearly 80% as a best in class organization of invoices properly linking to a purchase order and you’re at a third of effective matching you know is the rest of the group or all others.
HELEE: I thought you just go back and change the amount of the PO to match the invoice. It’s AP humor.
RYAN: It is funny.
HELEE: That’s funny.
RYAN: We’re not supposed to necessarily tease it although we know a couple people who do it that way. They will remain anonymous, but yes maybe updating your POs to match the invoice isn’t the best approach. So if we look at the one factor that or many of those factors are very important, but of course everyone kind of looks at cost when they’re building their business case so the all-inclusive cost to process an invoice, right? So the time and the people and the printing and all the things that happen perhaps in your process for all others. And there’s various different ways to find these metrics from IOFM or different groups, but all others, we have it at about 13 dollars. That still cracks me up. Like the invoice could be six bucks.
HELEE: I know.
RYAN: Right? And it’s costing you 13 to pay a six dollar invoice.
HELEE: You know what though? That’s when you put everything together, right? Like keeping the lights on, rent, overhead, benefits so it’s not that much in your face. I would love it if the bill said total amount due, six dollars, cost to process bill right under it, 13 dollars. Then it would be
like more in your face and…
RYAN: Really, it should. Yeah.
HELEE: Maybe it would upset people the way it upsets me.
RYAN: Yeah. I thought it was pretty funny. One time when I was a kid, I remember this pretty vividly. My mom was joking. She received a bill in the mail. I think it was from AT&T, I’ll just call them out. The bill was for a penny. It was literally for a penny. Like account had been closed, there was one penny left. And it was mailed so there was a stamp on it. So the stamp at the time was like 26 cents or whatever. Not to date myself too much, but it was 26 cents plus the paper plus the envelop to try and collect a penny from someone.
HELEE: Did she pay it?
RYAN: My mom probably did. She wanted to keep it tight and not have an open thing.
HELEE: She wrote a paper check and put it back in the mail for another 26 cents?
RYAN: This was some time ago, Helee. It was some time ago, but yeah to me it hearkens to that when it costs you more to pay your bills than the actual bills themselves. Best in class can get down to two dollars so two versus 13 dollars. Again, there’s different methodologies about what costs you put in here, but we see it from five to 20, five to 15, two to 13. Typically, we’re seeing ten dollar reduction in processing costs if you have a best in class process versus a traditional process of moving invoices.
HELEE: Sounds like a no-brainer to me, but let me ask what might be a provocative question being as that I work at an AP automation company. Can you be a best in class AP department without automation, without technology, without an AP automation solution? Is that possible?
RYAN: I mean I’m saying no way. I think from what I pull from this, I don’t think they say it that clearly, but I think that Ardent would agree, if I may, that no. No, technology is going to have to be involved in this process.
HELEE: And the good thing is the technology, it’s approachable now, right? It’s not this big undertaking where you have to do this big thing. It’s approachable.
RYAN: So let’s talk about figure ten here: Core AP Program Capabilities. I’ll talk about the percentage success that a best in class organization has. Maybe I mentioned some of the all others, but a best in class organization, if we talk about the ability to make an electronic payment, ACH, card, wire. By the way, if you don’t know the difference between ACH and wire, I think Helee, didn’t you just do something on that, Helee?
HELEE: I did indeed. This morning I did a two-minute video. So if you don’t know the difference, it can break it down for you. I don’t think this podcast is the right place for it, but…
RYAN: Agreed, but the details, they’re like the nuance and we all know…
HELEE: The details…
RYAN: Kind of roughly know, but you really covered it.
HELEE: Yeah. I mean yeah. Have a look at the video. It’s available on our website and if you want me to talk a bit more about it, but all right super quick. You want to give me 15 seconds?
RYAN: Yes. Yes, I do.
HELEE: All right. ACH; domestic, no need for a quick payment, reversible and cheap or free. Wire? If you need international, if you need it quickly, but remember, susceptible to fraud and cannot be reversed. That’s real quick. The quick nutshell, but more on that in the video.
RYAN: Thank you for that, Helee. So 92% of best in class AP departments have the ability to make electronic payments. Eighty-eight percent have the ability for two or three-way matching. They have those capabilities. The ability to process an invoice straight through which is i.e. matching and validation without human intervention, 81%. The ability to measure key AP metrics so now you start to talk about benchmarking and performance and that’s how you really can get continuous performance and really hone in and do some great tactical things even, but processing time, invoices process, how long people are sitting on approvals, discounts captured, all that stuff, 81% of best in class organizations can do that. So you kind of see here the point of our journey, 81% of best in class organizations can do that. So not even 100%, right? So there’s still a journey, there’s still a journey to get to best in class and talk about what you can do. You don’t have to be perfect. Not every single organization can capture every single metric so don’t even worry about that.
Standardized AP process across the enterprise and best in class, three-quarters of the organization can standardize and effectively run on a standard thing. Thrilling, yes?
HELEE: I mean I’m still awake.
RYAN: I’m going to give you one stat about all others. So let’s see here. What percent do you
believe can make electronic payments if you are not best in class?
HELEE: Ooohh, 17.
RYAN: Actually, it’s closer to 60%.
HELEE: Ooohh. All right.
RYAN: I think that goes to show that you know electronic payments, although 92% of best in class organizations can do it and 62% of non-best in class, but I think it’s becoming ubiquitous if you will.
HELEE: I guess I talk to a lot of folks still cutting paper checks and that’s part of their pain point and part of why they’re taking that first step on their AP journey is they know paper checks are not the way of the future.
RYAN: Well, you’re talking to 38% of these or 8% of the best in class so let’s help them out. Okay. Three core principles to a best in class AP program. Let’s touch on those. And this gets somewhat strategic and philosophical almost if you will, but an innovation ready culture.
HELEE: Oh yeah.
HELEE: I could get real philosophical on that.
HELEE: And that’s part of it. A lot of the stuff even as you’re reading off those stats, it’s behavioral change. And you know on one hand, you say, “Oh, yeah. Just change a bunch of people’s processes and behaviors,” but that’s easier said than done you know. I think I always like to rag on Debbie from accounting and no offense to anyone out there in the world whose name is Debbie who is in accounts payable. But you know sometimes it’s these tribal practices of like there’s only one person in the organization that knows how to get it done or that’s just the way it has always been done or that’s how we’ve always done it. Don’t move my cheese kind of thing. And you’ve got to get those people to buy in or get them out of the way one way or another because they’re going to hinder any type of you know innovation or technology or process improvement that you’re trying to do. And you know my advice at this juncture is just don’t underestimate that. It can be done. It can be done, but you’ve got to either get those people on board or get them out of the way.
And then you also have to have you know leadership team that buys into the bigger picture here that technology is coming, that technology is approachable, that you cannot be a best in class AP department or a best in class organization without it. And it depends again where your company is on that innovation curve or that adoption curve of technology. And I’ve talked to folks that are you know any given step in that broad spectrum. And it’s just a maybe different prescription for each one.
RYAN: That’s right. Thanks, Helee. And yes, I ask everyone to kind of reflect personally and on their business how innovation ready are you? How innovation ready is your department or the culture of your organization and is it where you want? Or do you want to maybe influence that and become more innovation ready or I guess less perhaps? But innovation ready does promote efficiency is essentially what Ardent has demonstrated with this. So innovation ready culture means you can be more efficient per the report so that’s interesting.
This one is a little interesting; leveraging invoice processing as a beacon of organizational effectiveness. So a little grandiose, but this reminds me of what we talked about a little bit is you are what you eat sort of thing…
RYAN: And if your business is what you spend and you can actually look at that and your AP department is a good corporate citizen in saying all this data flows through our department. Let me shine a light on it for whoever needs to see it and AP is a beacon for organizational effectiveness.
HELEE: Yeah. And maybe the beacon is the aspirational state, but in the meantime it’s an indicator, right? If you kind of let your back of house get sloppy and it’s not best in class and you kind of let it be what it is and it lags, how are you treating the rest of your business? Am I going to buy your product? How are you treating your product? How is you customer service? So until it’s a beacon, let’s just call it a reflection of what the rest of your organization is doing and how you run the business.
RYAN: Yep. I like it. So a final core principle. The first one was innovation ready culture does well, AP can be a beacon and the other core principle and I don’t want to call this cute. I don’t know. They made a fun thing here. The best in class standard is standardization.
HELEE: I don’t know if I’d call anything about the Ardent Report cute.
HELEE: It’s not cute. It’s serious.
RYAN: I don’t know. These pink and blue colors are cute. I don’t know if that’s just…
HELEE: That’s just your printer.
RYAN: I think it’s a bad printer actually.
RYAN: I don’t think they’re actually these colors. Yeah. Yeah, but…
HELEE: No, but point taken; point taken.
RYAN: It’s kind of like the only constant or the only, what’s the thing? Change is change or something?
HELEE: The only constant is change.
RYAN: Is that it?
RYAN: Was that it?
RYAN: The only sure thing around, oh yeah.
RYAN: The only constant is change.
HELEE: If you want to be in a robust entrepreneurial environment…
HELEE: But that’s a different topic for a different podcast.
RYAN: The best in class standard is standardization. Thank you.
HELEE: No, but that’s fair. You know it’s kind of going back to what I mentioned before about these tribal practices and you have one person. I talked to someone at the APP2P Conference put on by IOFM recently. So it’s Accounts Payable Peer to Peer. It’s where all these folks come together twice a year to share ideas and best practices. You still have the people that are like my AP process is a combination of Gmail flags and Post-its in different color folders that I then run to this person and to that person. So if you don’t have a standard process or you only have one person with pink Post-its that knows what’s going on in your AP organization, there’s no standardization. There’s no process. Nothing survives that person, right? So when my friend Debbie from accounting leaves the organization, does AP just fall apart? I mean in a lot of cases, it might you know? It really might. So in standardizing those processes, get some automation, get some technology to streamline them and then make sure that their standard documented so that their plug and play regardless of any one individual and kind of get out of this notion of everything being tribal. I think a customer said that word to me, “tribal” and I really liked it.
RYAN: And when we talk about standard, it doesn’t mean that every single invoice has to look the exact same way and that it’s going to go to the exact same approver, that’s not what standard means. I mean standard means putting this in place so that your standard process could be very complex still. It doesn’t mean that there can’t be, it’s not like everything is always you know keep it simple stupid kind of thing. You can have many vendors, few vendors, complex set of services and products and lots of challenging, interesting scenarios to handle. But you have a process where it feels standard from the input to the output and all the amazing things that happen in between flow through in a certain way even if there’s a lot of branches…
RYAN: As a component of the process to what standard is.
HELEE: Yeah. It can be an intricate process, but still be standard.
RYAN: Sure. Okay. So this one, I think this kind of drives in what we’ve been asking ourselves here, AP technology utilization. So again, they’re saying absolutely best in class uses, I kind of wrote in here, “Best in class” I wrote “BiC.” I started calling it BiC. “BiC uses more tech…duh” is what I wrote in here. So that was my conclusion because figure 11 just shows everything; document, imaging, scanning, approval routing. Who’s using tech? Best in class or all others? And every bar is just best in class uses more tech for these things.
HELEE: I’d ask you if you trademark that whole BiC thing, but I think the pen company already did.
RYAN: Yeah, but this is a capital B and a capital C. So it’s a little different. Best in class…
HELEE: Got it, got it.
RYAN: Uses more tech? Duh. Okay, best in class. Is that it on best in class? It is not because there is one thing here in highlighter, orange highlighter: “Many enterprises struggle with the fundamental ability to manage their data and transform it into actionable intelligence.” Did you know that?
HELEE: I do now.
RYAN: If you’re best in class, you’ve enabled yourself. And I think being best in class, to be clear as we get to the end of chapter three and go into chapter four here, I want to say when we talk about best in class and automation, automation from our perspective, I think we agree, is setting the foundation to allow you to do a bunch of other things. So if you automate effectively, you have smarter systems, you have a documented process that is enabled by those systems. Then you’re enabling yourself to be more effective, be more strategic, capture early pay discounts, all these things that you’re going to do because you set a foundation of technology. So you need to be smart and intelligent. And again, it’s not the robots taking the job; it’s about getting the menial stuff out of the way so you can actually utilize the talent you have in your organization to work towards best in class. And that is the end of chapter three, one more to go.
RYAN: Wait, did you want me to cover the appendix or us to cover the appendix or what did we decide?
HELEE: You know on behalf of our listeners, I’m going to say no appendix.
RYAN: Chapter four…
HELEE: I think we’re good.
RYAN: We’ll put a bow on it?
HELEE: Yeah, I think we’re going to wrap it up.
RYAN: There’s some cool stuff in the appendix, but all right. All right, fair enough. All right. Chapter four: “Strategies for Success.” Successful leaders keep their teams on track by continually assessing progress and correcting course as needed. High-performing tends to be agile and nimble. That’s interesting. That’s the way of the world around Goby here. We’re always talking about continuous improvement and agility. It’s one of the methodologies of our onboarding or change management processes; the agile approach. Start moving the needle, respond as things come in and continuously improve. So I appreciated seeing that. The more value an AP team delivers and remember value must be regularly communicated to the enterprise at large. I’m going to let you go off on that one because I know you love that.
HELEE: You know I’m jumping out of my seat on that.
RYAN: But the more value an AP team delivers, and it must be communicated, the easier it will be to win support from enterprise stakeholders to continue to invest in intelligent AP functions.
HELEE: Yeah. And I mean the thing about that is listen, if you want to implement a proper AP automation solution or do any sort of change management or standardization of your processes, it’s going to take time, right? It’s going to take time. Many weeks, many months even. And in that time, the stakeholders especially executive level, they might get impatient. They may say, “I invested this money, what’s happening? Like do I have to wait four to six months to hear something?” So it’s up to your team and if you’re the champion of this initiative to communicate those nuggets of success in a way that is not noise, but in a way that is very clear. Like yeah, we’re not fully up and running yet, but here’s some wins from this week or here’s some wins from this month and here’s some noticeable differences or a couple you know anecdotes of how this is working and how it’s an indication that it’s going to work.
But it’s a delicate balance between you know bombarding people with things that are not meaningful or annoying or just going radio silent and then you’re three, four months into a thing and you’re like, “Oh, how is that thing going? I haven’t heard anything. It must not be going well.” So I’m a big advocate of tasteful communication and knowing what is the appropriate amount and cadence, even the appropriate channel of the communication. Is it a quick phone call? Is it a concise email to the right people at the right cadence to communicate your success and to reassure people that this is the right thing and that things are moving in the right direction? And to me, that is the difference a lot of times between success or failure.
And even, I will add in my past life, I think I mentioned on the first podcast, I’m going to get it in every single one that I went to school for architecture so as to do construction project management. Same kind of thing, right? There’s a lot that happens, good, bad and ugly between the time the project kicks off to the time that things fully build and ready for people to move in. It gets scary at times, it gets scarier at some times, but it’s up to you to really communicate big picture what’s going on and the successes you’re having to just re-instill confidence in the entire initiative or the entire project.
RYAN: So celebrate those wins.
HELEE: All right. Watch me. I’ll step off my soapbox now. I put it away and I’m off it.
RYAN: Well, no. I’m going to continue.
HELEE: Oh you’ve got to add?
RYAN: I’ve got a follow-up question.
HELEE: All right. Here, I’ll give this to you.
RYAN: Yeah, I’ve got a follow-up question. So celebrating the wins, I think is what you described there in the three or four paragraphs, but you want good communication. What about a bell on a wall that you clang when there’s success that everyone knows, but it also scares some people?
HELEE: I don’t know. That’s over the top.
RYAN: Oh, is it, CRO?
HELEE: Not interested.
RYAN: With the bell? Okay. We’ll move on then. Modern AP teams should prioritize data management. And this I think is the point we’re trying to make is that you prioritize data management, but the focus is on extracting intelligence to improve performance. Should we pay suppliers early, on-time or late? You know this is cash management. This doesn’t pay everyone early. What deal are they offering? That sort of thing. So it enables you to ask the smart questions and then do what you want to do. Are we complying with regulations? Do we have controls in place to minimize and prevent fraud? A complex, but hilarious cartoon just went out on that. Are we helping to improve supplier satisfaction? Don’t forget that huge win that can come from this. Some organizations have different cultures about how they, I guess I’ll say treat vendors or suppliers. Some of them are very strategic. It’s very important to have high supplier satisfaction. Are we making the process easier or harder for internal stakeholders? Are we an easy organization to work with? Have we prioritized the capturing and extraction of data? Do we have technical analytics? So these are all the things that a modern AP team should be able to do.
Okay. General recommendations for action. So what are we going to do? Adopt a customer, service-led mentality. Transform AP from a tactical unit to a more forward thinking, strategic and value added team, right? Nothing is really important. That’s that mindset change that we have at Goby and that we hope that AP practitioners continue to adopt.
HELEE: Yeah. And that’s kind of how we got to our tagline of “Rethink what AP can be” because it’s not just about jamming in some automation software that’s going to shave minutes off of your processing time and set you up for success. It’s really about rethinking the whole perception of the AP department, the value they add to the organization, the lens through which they’re seen as a strategic part of the business rather than a necessary afterthought of a back of house function. So that’s really what we’re trying to tee up our customers to do in their AP departments is you know kind of be vital to your business.
RYAN: Yep. And that was the next point here was other parts of the organization, they mentioned procurement and treasury; the obvious frontrunners of how you can start to talk about the value added although there are others. Again, we’re talking now about bullets about how to move forward, prioritize the reduction of invoice exceptions. I think that’s a nice win that you’ll celebrate if you can start reducing exceptions. People will feel that pretty immediately and then begin developing a capabilities roadmap for the future. So don’t forget to do some planning.
Okay. A couple more points here and we will be able to put a bow on this thing. So innovation led recommendations for actions. So now, we’re talking about action, actionable things, how to move forward specifically that are innovation led. So lay the foundation for the AP unit to become innovation ready. There are two potential states within the average business; innovation ready and innovation adverse. And you already hit on this I suppose.
HELEE: I think so, yeah.
RYAN: So you know which one is your organization? Pursue comprehensive AP automation. So again, Ardent from what they’ve learnt from the best practice organizations and the right strategy for success is do pursue holistic, full comprehensive automation.
HELEE: Well, that kind of answers my question from before. Can you be best in class without automation? And according to Ardent, it sounds like probably not.
RYAN: So how quickly do you think you’re supposed to get this done? How long of a roadmap would you build? One week? Two weeks? Or a three-year roadmap? Laugh it off there for you.
HELEE: Anything in between?
RYAN: Not according to Ardent.
HELEE: Oh wow. All right then. It’s probably a couple years.
RYAN: Probably a three year roadmap for again, holistic automation.
HELEE: But remember, quick wins along the way, communication of success, the needle’s moving throughout those three years. No one’s waiting three years for that full gratification.
RYAN: Yeah. It better not be a three year planning process. Yeah. No one’s going to go for that. Okay. The last section here, “The Next Generation of Accounts Payable;” top capabilities for the next generation of AP organizations. Customer service approaches. That’s high on the list of something they’re looking for; how to provide the best possible customer or vendor service, fraud and compliance, analytics and business intelligence. Yes, I feel like we’re a little bit on repeat right now, but these are the things that keep coming up.
HELEE: At least the priorities are aligned.
RYAN: Yep, they are aligned. These different surveys and their four figures resulted in these types of things: service, payment, supplier relationship management, broader finance skills. Top AP organizations will continue to have broader finance skills hopefully enabled by being able to move budget from menial tasks to other places and a deep technology acumen.
In conclusion, Ardent says, “Over the next few years, they predict that a new type of intelligence is going to enable AP teams to view their operations differently. It is going to force these same leaders to manage them differently. Accounts payables age of intelligence demands powerful analytics and deep insights. It demands agility, the ability to make better informed decisions across an organization can and will be game-changing. Accounts payable leaders” to our point “must start now to ready their teams.”
HELEE: So like Gmail, tags and Post-its are not going to get us to where we need to be in the future.
RYAN: I don’t think it is, but you can sit down and have a discussion about the roadmap and maybe those are on your roadmap today and you start to look at what it takes to really think about the age of intelligence and how that applies to your organization.
HELEE: All right. Well thanks, Ryan. That was amazing. And I think we did agree to skip the appendix, yes.
RYAN: Yeah, but figure 14. Come on. No, we’ll skip it.
HELEE: All right. Great. That brings us to our closing game, “Craft Coffee” or “Craft Beer.”
HELEE: I believe it’s my turn…
RYAN: It is.
HELEE: To try and stump you. Starbucks! Just kidding. Just kidding.
HELEE: Warm up. It’s a joke.
RYAN: I know that one.
HELEE: Craft coffee.
RYAN: I know. I know that one.
HELEE: It’s not really craft.
RYAN: It might not be either. I think that’s kind of the bit. Yeah.
HELEE: It’s neither, right. All right. All right. All right. I got this for you. “Black Rifle X Company” is the X brewery or coffee? “Black Rifle X…
RYAN: Oh so it has…
RYAN: The answer in the name.
RYAN: And you’re replacing that with the letter X?
RYAN: “Black Rifle X Company.”
RYAN: I know that one, I think. Politically, I didn’t like that one, I think because it’s about guns,
HELEE: But remember, we’re not getting political on this podcast.
HELEE: Maybe a future episode.
RYAN: That is coffee.
HELEE: Yeah! Ding ding ding!
RYAN: All right! All right!
HELEE: You got it! “Black Rifle Coffee Company.”
RYAN: I already caught that.
HELEE: In no way are we affiliated or promoting, but…
RYAN: Well, maybe, maybe not. I don’t really know what they do, but…
HELEE: The coffee is good actually,
RYAN: But why did you choose that one?
HELEE: It was actually a gift that was shipped to our home from one of my husband’s colleagues in New Mexico and it was great. There was like a six pack variety, they were all delicious. So no matter your stance on guns and like I said, 38 minutes into a podcast is not the time, but the coffee was good.
RYAN: I do like coffee a lot and actually, I would say you know what? Starbucks, I’d almost put them in the craft pile. Now, this is probably more divisive than any politics so whether Starbucks is good or not or what the best coffee is, but I think they’ve done a pretty good job from being a startup to still having some pretty good coffee.
HELEE: Maybe we can unpack that on episode three.
RYAN: We should. We should unpack that.
HELEE: All right. Well in the meantime, check us out at gobyinc.com. Thank you again for
joining, if you’re still with us. Hope you gleaned some new insights from us digesting the Ardent Sate of ePayables 2019 Report. This has been Automate This the podcast. Do not forget to check out Automate This the cartoon and we will see you again soon. Have a great day.