The 7 Essential KPIs of Accounts Payable
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Whoever coined the phrase old habits die hard must have worked in accounts payable (AP). Today, AP remains inundated with paper as other areas of life and business go electronic. A recent study found that paper-based invoices still make up 90% of total invoice volume for a majority of AP departments. The cost of supporting this habit is a steep one. Not only does it prevent assurance of prompt and accurate payments, it fails to set your business apart from competitors.
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The 7 Essential KPIs of Accounts Payable
- 1. 7 THE KEY KPIs OF ACCOUNTS PAYABLE
- 2. Identify your troubling AP habits and trends …so that you can evaluate how your processes stack up to industry benchmarks down the road.
- 3. 1 Measure the NUMBER OF INVOICES PROCESSED per employee (or per month). INVOICES PROCESSED PER EMPLOYEE PROCESSED NOT PROCESSED Click here for the full guidebook.
- 4. PER EMPLOYEE 1 This metric can CHANGE IMPRESSIVELY after applying better processing methods. INVOICES PROCESSED PROCESSED NOT PROCESSED Click here for the full guidebook.
- 5. INVOICES 2 Measure the PROCESSING COST of each invoice. COST TO PROCESS $3.00 $4.25 $2.50 $3.75 $6.75 Click here for the full guidebook. 2+ Page Invoices Faxed Invoices Emailed Invoices Mailed Invoices 3 Level Approval Workflow
- 6. 2 COST TO PROCESS Start to add up these costs for just one invoice, and you have yourself ONE EXPENSIVE AP PROCESS. INVOICES $3.00 $4.25 $2.50 $3.75 $6.75 2+ Page Invoices Faxed Invoices Emailed Invoices Mailed Invoices 3 Level Approval Workflow Click here for the full guidebook.
- 7. WHAT METRICS SHOULD YOU BE AIMING FOR? Check out this video from Taulia on the average cost per invoice to set your benchmarks. TauliaTV: The 2014 Ardent ePayables Report DON’T FORGET TO COME BACK AND REVIEW THE OTHER 5 KPIS!
- 8. 3 Measure the TIMELINESS of your payments. PAYMENT TIMELINESS 3 DAYS 5 DAYS 2 WEEKS 3 WEEKS Click here for the full guidebook. INVOICE 110020 INVOICE 120039 INVOICE 112321 INVOICE 390090 INVOICE 289981 INVOICE 664501 INVOICE LOST — LATE PAYMENT ACCRUING
- 9. 3 PAYMENT TIMELINESS Hopefully you won’t have too many situations like INVOICE #664501 over there ... 3 DAYS 5 DAYS 2 WEEKS 3 WEEKS INVOICE 110020 INVOICE 120039 INVOICE 112321 INVOICE 390090 INVOICE 289981 INVOICE 664501 INVOICE LOST — LATE PAYMENT ACCRUING Click here for the full guidebook.
- 10. 4 Measure your CAPTURED DISCOUNTS. $250 SAVINGS Thank you for your early payment! Click here for the full guidebook.
- 11. Measure your CAPTURED DISCOUNTS. ... if you have any. $250 SAVINGS Thank you for your early payment! 4 Click here for the full guidebook.
- 12. 5 Look at the Level of Automation ALREADY IMPLEMENTED. Yesterday, I sent Karen an invoice for approval via email ... instead of walking it to her desk. Click here for the full guidebook.
- 13. Yesterday, I sent Karen an invoice for approval via email ... instead of walking it to her desk. 5 Look at the Level of Automation ALREADY IMPLEMENTED. … sorry, email doesn’t count as automation … Click here for the full guidebook.
- 14. 6 DUPLICATE PAYMENTS Measure the PERCENTAGE OF DUPLICATED invoices captured. 1 2 Click here for the full guidebook.
- 15. 6 ... or “QUAD-DRUPLICATED” invoices. OR ... QUAD-DRUPLICATED 1 PAYMENTS 2 3 4 Click here for the full guidebook.
- 16. DUPLICATED INVOICES CAPTURED 7 Click here for the full guidebook. Measure the percentage of DUPLICATED INVOICES CAPTURED.
- 17. TOO MANY NOT CAPTURED. 7 Click here for the full guidebook. What if we told you that you could RELY ON TECHNOLOGY to assist you in capturing your duplicated invoices? You’d likely sleep better at night, right?
- 18. NEED MORE? There are 12 defined steps for kicking your paper habits in Accounts Payable. If only there was something to guide you through them ...