In accounting and business, if you do not proactively measure your accounts payable processes, you will not be able to effectively improve your internal processes and procedures. You have to know what exactly is happening with your AP department to determine the benchmarks and how automating the process can mean a lot for your organization.
Invoice Volume vs. Staff Time
The number of invoices staff members can process monthly, quarterly, or annual basis will help you determine the efficiency of department systems and processes. If you are seeing an overall lower input or inconsistency in the process, the process is going wrong somewhere.
Average Time to Process an Invoice
This metric will help you identify potential efficiencies or roadblocks in the process. Considering the average time to process an AP invoice can help you better manage different types of invoices and payments allowing you to identify trends and create benchmarks. Using automated AP software over manual invoice processing can help reduce the time spent in invoice processing.
Average Cost to Process an Invoice
Adding average invoice processing cost to the list of benchmarks gives you a clear idea of the AP department’s bottom line. Knowing invoice volume and average processing costs will help you know overall operating costs for invoice processing.
Invoice Submission Methods
Knowing the methods in which your vendors submit invoices for payment will play a key role in the company’s invoice process. Reviewing invoice receipt methods gives you the ability to compare your performance of invoices processed manually vs. electronically. Understanding this will help you identify the need for investing in technology, i.e., automated accounts payable software.
Set Goals for AP Management
Defining top goals for AP management such as faster invoice processing times and reduced processing costs on the average number of invoices processed per month can help determine what measures to take to achieve these goals. Automating accounts payable process is something that helps us achieve goals faster and in an efficient manner.