Making Accounts Payable Strategic - First Steps & Why Now is the Right Time

If you're in accounts payable or your job is even on the periphery of AP, you have probably heard or read people talking about how accounts payable should become more of a strategic function within accounting and finance departments. Much of this dialogue stems from recent leaps in technology advancement like AI-based automation and analytics, and touchless invoicing. The days of processing invoices manually or even kind of manually are just about gone.

For organizations running Microsoft Dynamics, much of the infrastructure to turn AP data into strategic insight is already built into the ecosystem. Power BI pulls live transaction data from Dynamics and surfaces it in dashboards that make spend patterns, vendor performance, and cash flow trends visible at a glance. Copilot, embedded directly into Dynamics 365, lets AP teams query their own data in plain language -- no analyst required.

So how does AP use all the fancy new tech to become more strategic?

This post will look at a general pressure many are feeling this year to reduce operational costs and how this represents an opportunity for accounts payable pros to step up to the strategic plate. Then we’ll look at some of the other opportunities AP has to become a more strategic function.

The Budget Pressure is On: How Accounts Payable Can Help

According to Gartner's 2026 Budget Assumptions Report, 36% of CFOs are targeting corporate finance budgets for cuts. Nearly all CFOs said they would target functions where technology or process redesign can yield efficiency gains.

When CFOs are looking to cut costs, they typically turn to department heads and business unit leaders -- people who see their own slice of spending but rarely the full picture. 

AP sees it all. As a payables leader, you have the data and tools to identify duplicate vendor relationships, flag underutilized contracts, surface maverick spending and pinpoint categories where consolidated purchasing would drive better pricing.

Beyond spend analysis, AP controls payment timing -- which means it can optimize working capital and free up cash without cutting a single program. No other function is positioned to deliver that kind of cross-functional intelligence. When budgets tighten and leadership is looking for answers, AP has the data to drive meaningful cost reductions.

Direct Cost Reductions from AP

Cost reduction offers some low hanging fruit that can yield fast results and demonstrate the value of AP as a strategic collaborator within an organization. Here are some easy wins to help you get started. For more in-depth guidance check out our new Guidebook "How Accounts Payable Can Drive Company-Wide Cost Reductions"

1. Hunt Down Hidden Discounts: Dig into your top 20 vendor contracts. Buried in the fine print are early payment discount terms that nobody has touched in years. Find them, use them, and crunch the savings data.
2. Stop Paying Three Vendors to Do One Job: Pick a category, any category, and count how many suppliers are doing essentially the same thing for different departments. Spoiler: it is probably more than one. Add up the combined spend and hand that number to procurement.
3. Stop Paying Late Fees: Late fees are the most avoidable cost in AP. Half of all B2B invoices in the US are currently overdue, which means clearing this bar is not that hard. Set up automated reminders for vendors that enforce penalties and move on.
4. One Fiscal Quarter of Data Might Surprise You: Pull a single quarter of invoices and sort by vendor, department, and purchase type. Patterns will jump out fast. Rush order habits, end-of-period splurges, seasonal spikes. These are the stories that turn AP data into something leadership actually wants to read.
5. Break the Approval Logjam Somewhere in the approval chain, things are grinding to a halt. Track where it happens and draw out actionable insights from the data.

Beyond Direct Cost Savings

Here are a few more paths for AP teams to consider in their efforts to strengthen the strategic value of their department.

• Supplier relationship management. Vendor relationships built through AP can be used to negotiate terms, build supplier programs, and flag risk early.
• Working capital optimization. Payment timing controls working capital. Strategic teams adjust it dynamically based on cash flow needs.
• Fraud prevention and financial risk. AI-driven AP catches duplicate invoices, fraud, and suspicious patterns in real time.
• Forecasting and FP&A support. Committed spend and open POs make AP a useful input for forecasting and FP&A.
• Contract Compliance. AP can catch billing errors, rate discrepancies, and off-contract purchases before they compound.

Conclusion

In this post we covered how budget pressure creates a real opportunity for AP to deliver cost reductions, strengthen vendor relationships, and contribute data that leadership can act on. The tools are in place and CFOs are actively looking for functions that can do more than process transactions. For AP, this is the moment to step up.