Rectangle Created with Sketch.

4 Simple Steps to Align AP and Procurement (and Why You’ll Love It When You Do)

By The Direct Commerce Team

Follow these steps to bring your AP and Procurement teams together for greater efficiency, accuracy and cost savings.

Four colleagues working together to align their company's AP and Procurement departments

“Accounts Payable is an area that I think all of us see is rich in potential for improvement and automation. But, I think it oftentimes gets the least attention. There’s a lot more that we can do.” social-icons-twitter-retweet-circle 

- Billy Williams, CTO, Direct Commerce

Accounts Payable (AP) has a lot of hurdles to overcome to get invoices paid on time: ensuring the PO and invoice match, receiving approvals, staying on budget, keeping systemsand suppliersup to date, and trying to communicate with procurement. Levvel Research’s 2020 Procurement Management Survey revealed that 30-percent of organizations find poor communication between procurement and AP to be a top procurement process challenge, which has been exacerbated due to the new remote work environment (, 2020 Procurement Insight Report, 2020, August 20).  

While procurement and AP have historically been siloed, focusing only on their piece of the procure-to-pay (P2P) process, aligning the two provides greater cost savings, efficient processes, and improved supplier relationships.

If you open the lines of communication, collaborate on your standards, and share data, you’ll receive  benefits like: 

  • An increase in working capital
  • Ongoing process optimization
  • Improved relationships with suppliers
  • Better insights into cash flow, forecasts, and invoice handling

4 Steps to a Successful AP & Procurement Partnership

Interested in capitalizing on these benefits but unsure how to begin? Start by championing change and reinforce the message that collaboration and teamwork can have a valuable impact on both sides. Here are four steps you can take immediately to create a powerful alliance:

1. Develop a plan for collaboration.

Start to align AP and procurement by bringing everyone who will be involved together, including leadership, to discuss organizational pain points and where support is needed. Focus on those pain points and show how solving them will bring business value and help meet both team’s KPIs. Outline a mutually beneficial plan, including spending rules and other best practices, to increase efficiency, accuracy and cut costs. 

When putting the plan in place, encourage AP and procurement to meet regularly and keep an open line of communication in case any changes need to be made. This lessens the chance of employees circumventing the new plan in favor of the old process.

The right P2P partner can help you create a plan to bring your organizations together. Need help getting there? Just ask.

2. Streamline the PO process for faster payments.

Both AP and procurement benefit from a streamlined PO process with buy-in from both organizations. To achieve the best results, create a chain of command and hold each department accountable for a piece of the process.

AP should be in charge of keeping an accurate, up-to-date list of suppliers that includes contact information and transaction histories for each supplier, without duplicates. AP should also provide information on payment holds, past-due invoices, and other performance metrics, so procurement can flag any repeat issues with current suppliers and have the data to negotiate better contracts with new ones.

With AP providing valuable insights to procurement, in return, procurement should agree to verify that all purchase orders are free from errors and discrepancies before they reach AP. This way, you can cut invoice processing time downsometimes from weeks to days.

Digitally automating your supplier community will help make this error-fighting effort seamless. Schedule a demo to find out how.

Another best practice to optimize processes is having a designated time, like the end of the day, when AP can send all purchasing questions to procurement, with the expectation that they’ll receive an answer in 24 hours or less. This way, procurement can set aside time to field inquiries without it interrupting their workflow. 

3. Embrace AP Automation for the world ahead.

Providers like Direct Commerce replace older, manual processes where suppliers are sending pieces of paper with more easy to use systems where any supplier can login and send an invoice whether they fax it, email it, or use electronic APIs that are available all the time.” 

    - Billy Williams, CTO, Direct Commerce

AP professionals spend too many unnecessary hours processing paperwork and addressing inquiries. With a self-serve portal, e-Invoicing, dynamic discounting, and other AP Automation capabilities, vendors can gain full visibility into invoice status, receive PO approvals in record time, request discounts for early payments that can lead to millions of dollars in annual savings, and more. Empowering suppliers to submit their own invoices electronically also frees up your AP resourcesa win win.

4. Use insights and intelligence for continuous improvement. 

With AP automation, collect and analyze data in real time, allowing your AP and procurement teams to improve their forecasting, budgeting, and planning for the future. Best-in-class businesses leverage their technology to drive value across their entire organization to improve stakeholder buy-in, analyze cash flow, invoice handling and fraud/compliance management. 

Use your data to gain insights into user workloads and activities, so you can work together to continually fine-tune and improve your processes. And, with  a secure web portal, view, print, or deliver reports to the right people by email or file download.

Collaboration between AP and procurement is vital for streamlining P2P processes and will lead to real results like increased efficiencies and cost savings. 2021 is full of opportunities to bring your team together. Start utilizing the steps above to prepare your organization for the world ahead. 

Ready to get started?

At Direct Commerce, we believe every team involved in the P2P process can build a better future by coming together and taking advantage of the best solutions the market has to offer. If you’re ready to get started, contact our team today and we’ll explore how our P2P solutions can support your goals, improve supplier relationships, and increase working capital. 

Topics: eInvoicing, Automation, Accounts Payable, Procurement