No area of business seems immune from change. Procurement, accounts payable and accounts receivable are no different.
Traditionally these functions have operated in separate silos. More recently, companies are approaching these areas in more of a holistic manner and looking at people processes and technology.
All of this is designed to:
- Improve efficiencies
- Reduce costs
- More effectively drive free cash flow
Speaking at the recent NationaLease annual meeting, Matt Clark, COO of Corcentric, said it is very important to view these trends not only through your own lens, but also through the lens of your customers and competitors.
In the area of procurement there has been a move to centralize, automate, and connect processes. There has been growth of e-procurement platforms and end-to-end electronic and automated processing design to make it easier to conduct business with companies. Ease of doing business is a huge part of supplier selection criteria, according to Clark.
Spend monitoring has come to the forefront for many companies, especially in the area of indirect spend. Executives are using business intelligence and advanced analytics tools to see where and how money is being spent throughout the organization.
This shift in focus has caused some executives to look for external partners — procurement consultants — to evaluate their current spend strategies, provide market intelligence and improve overall sourcing.
Accounts payable is also seeing an increased use of third party solution providers and an increased demand for outsourced payment solution providers that manage 100% of payments.
Third party accounts receivable solution providers are also being tapped more frequently to support a wide variety of invoicing and payment demands. Companies are starting to employ predictive analytics to credit and collections. “Traditional backwards-looking credit scoring methodologies don’t cut it anymore,” Clark said. “Companies are using predictive analytics to identify potential credit and collection issues in a proactive manner.”