You might be thinking your accounts department is doing well. However, if you are not able to measure the performance and profitability, especially when it comes to invoice approvals and payments, how can you tell?
Today, productivity is a measure of success, so knowing how to evaluate the productivity throughout the P2P cycle is important. Organizations understand that an effective accounts payable department will have a significant impact on the company’s bottom line and spend management. Companies identify automating approval processes as the first step to achieving efficiency. To reach that level of efficiency, the AP department should figure out new ways of doing business and change processes that are not working correctly. The most common notion in finance industry is...you can’t manage what you can’t measure.
Auditing is another important step that boosts your department’s performance. The following are three key steps in performing an audit:
Map your AP processes to track what‘s going on and closely monitor every step of invoice processing so as to identify process inefficiencies that need to be addressed.
Set benchmarks to evaluate how your department measures against industry standards in terms of invoice processing, average cost per invoice, and discount capture rates.
Figure out improvement areas by setting up challenging goals that are attainable including streamlining the review process while lowering processing costs and minimizing lost invoices and late payments.
By implementing accounts payable software, you can reduce overall processing costs, improve visibility, and enhance compliance. It gives you detailed insights that take your AP department to the next level. With AP automation, you will transform your AP department from a back-office function to a profitable cost center that drives productivity with increased savings.