Best-in-class Accounts Payable Departments
An IBM study identifies the qualities that distinguish best-in-class CFO’s from the rest of the pack. Technology and the advent of big data has had an impact on every occupant of the C-suite, in many cases, changing the ways they view and do business. But perhaps no one has seen their position change and their status elevated as much as the CFO. According to a recent study by IBM, “Pushing the Frontiers,” more C-level executives indicate that they work closer with the CFO than with any other occupant of the C-suite, except for the CEO. The IBM study is based on interviews with 576 CFO’s from around the world. If there’s one statistic that illustrates how technology and data have changed the CFO’s position, consider this: In 2005 only 35% of CFO’s surveyed considered integrating enterprise-wide data as essential. Today, that number increases to a whopping 82%. Blinders and silos are no longer part of the equation for best-in-class CFOs. They understand that automation, standardization, and collaboration are the engines that will propel their enterprises to continued success. Best-in-class CFOs leave laggards in the dust. So how does the IBM survey distinguish best-in-class when it comes to the CFO? In past studies, those executives who led the field when it came to planning, budgeting, forecasting, and fine-tuning everyday financial processes were labeled Value integrators. This latest study found an even more exclusive subset within the Value Integrators. IBM has labelled these executives as Performance Accelerators, executives who have mastered those values and functions far ahead of everyone else, including Value Integrators. These are the best-in-class when it comes to CFOs. These CFOs understand the value their team can have for a company when released from those low-value added tasks that take so much time and effort. A CFO of a major U.S. technology company is quoted in the piece, “We’re adopting a two-pronged approach: first making our transaction processing as efficient as possible….and second, training our finance staff to be real business partners…” In the study, 50% of Performance Accelerators have shifted their transactional activities to a standalone cross-functional shared services organization vs only 27% for laggards. And 57% of these best-in-class executives have implemented service delivery models for finance processes, including business performance analytics and reporting vs. 31% for laggards. They automate whenever and wherever possible. When it comes to data and analytics, this group understands the hidden treasure that can be found within the numbers generated in both financial and non-financial data. From tracking and forecasting supply-chain financial data to conducting industry and competitor analysis, and more, these best-in-class CFOs are always searching for new opportunities for growth. A CFO from a major Canadian Industrial Products company noted, “We’re moving from a reactive approach based on financial analysis to a proactive approach based on business analysis…” How does this affect your AP department’s future? The IBM survey doesn’t delve into the specific functions that fall under Finance’s purview; however, we’ve seen how best-in-class accounts payable departments have good habits similar to those described by the Performance Accelerator CFOs. In our infographic, “5 Habits of Highly Successful Accounts Payable Departments,” we note that those best-in-class departments set up system-level controls, develop clear policies for invoice workflow, implement processes for workflow compliance and dashboard solutions, and automate their processes. In addition, best-in-class AP departments are 59% more likely to have the support of an executive. If you hope to automate your AP processes and you’re fortunate enough to have a Performance Acceleratory or a Value Integrator as your CFO, you’re probably more than half the way to your goal. If not, show your CFO how turning your AP department into best-in-class can help transform them into best-in-class status as well. Learn more about the 5 Habits of Highly Successful AP Departments. The original article appeared on the Corcentric blog.