From Foe to Friend: Bridging the Gap Between AP and Procurement

In recent years, a growing number of organizations has started to recognize and value procurement’s potential for impact and strategic influence. They’ve overcome the stigma of being tactical administrators, and functions across the business – from marketing and IT to finance, operations, and even all the way up to the C-suite – are realizing the importance of building a strong, collaborative relationship with procurement. 

However, despite all of this progress in strengthening their internal relationships and elevating their status within the business, procurement’s relationship with Accounts Payable remains fraught with misunderstandings, misconceptions, and misalignment. 

That’s a lot of ‘misses.’ Far more than the business, or procurement and AP for that matter, should have to tolerate. 

Bridging the gap between AP and procurement

How can procurement and AP finally overcome their longstanding friction and join forces to create a more united front on behalf of the business?

In a recent episode of The Sourcing Hero podcast, host Kelly Barner spoke with Anders Lassen, Owner and Senior Procurement Consultant at Gradus Consult and the Founder of P2Connct, a Danish boutique consultancy focused on procure-to-pay process optimization and transformation.

They spoke about some of the reasons for the longstanding disconnect between procurement and AP and, most importantly, what procurement leaders can do to finally transform this historically chilly relationship into a value-creating alliance that benefits all sides, not to mention the organization a whole. 

To accomplish this, Anders has a few suggestions for how procurement can approach AP and foster a productive conversation that leads to a better relationship:

Get curious about the AP function

As Anders puts it, “procurement needs to understand what goes on in the business, and that includes accounts payable. Procurement should go to AP and ask questions like ‘what do you do?’ and ‘what does that mean’ to get a common understanding on what are the root causes of failure and the issues that procurement is also largely responsible for bringing to AP.”

Put yourself in AP’s shoes

Procurement should approach any conversation of this kind with AP with a spirit of collaboration, not a desire to exert control or only communicate procurement’s priorities. Anders says procurement probably won’t get very far with AP if they start the conversation with, “We think it would benefit you to understand us better.” Instead, he says, procurement should say, “We would like to better understand how you work, what your objectives are, and maybe what key metrics you are being assessed on. … with this open and curious approach, procurement is more likely to get AP engaged and willing to share information.” 

Find areas of alignment

Procurement should work with AP to find common KPIs that align their functions and motivate each team to collaborate and communicate. One easy place to start, Anders suggests, is supplier payments. “Finance is interested in paid on time or paid when we have agreed, and procurement is also invested in suppliers being paid on time because of their dependencies.” By identifying shared goals like this, procurement and AP can “come together, meet, and agree on what makes sense for the organization.”

Rethink procurement’s scope

It’s time, Anders said, for procurement to recognize their role in some aspects of the procure-to-pay process that might not have traditionally been seen as “procurement’s job” in the past. For example, when considering procurement’s role in e-invoicing, instead of taking the approach that, “‘procurement doesn’t care about invoicing. Just pay the supplier,’ it’s still important that procurement is actively involved and, at minimum, aware.

“Getting that into the common dialogue meeting, finding common grounds on what we want to be measured on and working towards that as a joint P2P team or delivery team, then I think we are set for success across the board,” said Anders.

Envisioning a better future for AP and procurement - together

Building a better relationship with AP isn’t just in procurement’s own interest, it’s good for the business as a whole. When procurement and AP overcome their misunderstandings and points of friction, they can build a true partnership that is built on shared goals, understanding, and a common desire to drive value for the entire organization. 

Procurement is the ideal function to drive this change in perception and communication because, as Anders says, they are the connective tissue – the “glue,” as he puts it – that brings collaboration, visibility, and value creation across the business.

“Procurement needs to be the glue, and we need to provide that value to the business. That means we need to reach out and develop relationships. We need to understand what our stakeholders and also our customers do, and AP is a customer as well as a stakeholder.”

For more on bridging the gap between AP and procurement, listen to the full episode of The Sourcing Hero here: