The data revolution is gradually changing the way businesses do everything. With the ability to capture information on everything they do, leaders have begun to ask to see numbers before making major decisions. One area that has been hit hard by the growing popularity of data analytics is accounts payable.
For busy accounting teams, data science has brought exciting changes. With so many tools available, they can now spend less time crunching numbers and processing invoices. However, a growing reliance on data analytics has also brought new challenges to these teams. Here are a few concerns accounts payable professionals will face in the coming years.
The drive for fact-based decision making has left many professionals with the arduous task of pulling reports on demand at a moment’s notice. These urgent requests can come through at any time, interrupting other urgent duties. After the fourth or fifth requested report of the month, an accounts payable team can begin to grow exhausted with these requests. In some cases, businesses may decide to give leadership teams the ability to pull reports without help from accounts payable staff.
Another challenge accounts payable teams face relates to transparency. Once an organization has the ability to pull reports on the work they’re doing, accounting professionals will face increasing pressure to make sure their numbers are accurate. The good news is, analytics can quickly detect accounts payable fraud, which means that if a team member is engaged in questionable activity, it may be identified before it can spiral out of control.
Avoiding Inaccurate Labels
Analytics affect accounts payable teams in a variety of ways, both internal and external. Externally, business partners may use technology to monitor the paying behaviors of each of its partners. If a business tends to pay late every month, a supplier or contractor may decide to end the working relationship at the end of a contract.
Internally, analytics may be used to monitor the performance of each person on the accounts payable team. One employee may show as making fewer errors or being more efficient than others on the team, leading that employee to be promoted while others either stagnate or face dismissal. As a whole, analytics can be used to compare accounts payable departments against other departments within an organization, potentially making comparisons that aren’t fair or accurate.
Overdependence on Science
When businesses make decision based on past experience and intuition, they take a risk. The numbers offer a more scientific foundation, giving leaders a logical justification for any decisions they make. Unfortunately, this overdependence on science can eliminate the important human element in those decisions.
Another issue facing accounts payable teams is that numbers can be misleading. Even when employees pull accurate data, leaders can misinterpret the numbers to suit the argument they want to make. For instance, a business leader trying to justify not investing in new software could ask accounts payable team members to export certain numbers, then use those numbers in a misleading way. Accounting staff will eventually learn to be cautious about the reports they provide, ensuring they’re formatted in a way that clearly states the facts, rather than leaving information open to interpretation.
Accounts payable teams serve as the financial foundation of a business. With data analytics in place, some parts of their jobs can be automated, making things easier. However, an increasing reliance on data has left these teams facing a few new challenges as they try to provide reports and support upper management. By understanding these challenges, they’ll hopefully be able to come up with great ways to overcome them and make data analytics work for them.