Change the Old Faithful perception that’s keeping your AP department from outperforming
Erupting around 17 times per day and spraying an average of 130 feet in the air, Old Faithful is, as its name indicates, a reliable attraction for visitors to Yellowstone National Park. In fact, scientists can predict the timing of its powerful blasts of steaming hot water within 10 minutes at 90 percent accuracy.
But what does a geyser at one of the United States’ most popular destinations have to do with accounts payable? According to a recent study from the IFO, the majority of CFOs describe AP as a “reliable” finance department, with twenty-nine percent saying they can count on their accounts payable team to “get the job done.” Only 13 percent of CFOs called them “real strategic partners who are constantly adding.” And a small, yet still alarming, percentage of CFOs (3.7 percent) said they “are not familiar with that group.”
As far as most CFOs are concerned, AP is the Old Faithful of the finance realm.
A 2016 report from Ardent Partners yielded some rich data on the metrics that AP departments prioritize versus the metrics that CFOs use to evaluate AP’s performance. And while it’s not surprising that the two aligned around Old Faithful metrics like timeliness and accuracy, there were a few performance areas top of mind to the CFO that weren’t on AP’s radar. Could they be the keys to ending your CFO’s outdated perception of AP and implementing a new outperformance strategy? Let’s explore.
The perception that AP is reliable is not, by itself, a bad thing. But reliability will only get you so far. “Although the industry is in the midst of a broad-based transformation, the general perception of the AP function significantly lags recent industry advances,” explains Ardent Partners. Is your AP department stuck in an Old Faithful role within your organization? If so, transforming the way your CFO and the broader enterprise sees AP is going to require a bottom up shift in mindset and an aggressive push to align “department goals with business priorities.”
Ready to break free of outdated perceptions? Read Automate to Outperform Across Purchase to Pay white paper.