Are you unsure about the current status of your Accounts Payable (AP) invoice process? Do you have a feeling that something is amiss, but can't quite figure out what? Conversely, you might be thinking that your existing system is working fine, but it would be better if you had some way of ascertaining the fact. Well, there is. There are a couple of methods that allow you to conduct a health check on your present AP invoice process. Check out the easy tips below:
Choosing an Apt KPI for Your Business
You understand your business better than anyone else, and so it is your responsibility to determine the key performance indicators (KPIs) that are appropriate for your situation. Matching invoices against a supporting document, like a contract, purchase order (PO) or a goods receipt necessitates that you monitor the automation level, total lead-time, manual connection level, and lead-time waiting for manual approval. However, if your job involves dealing with non-PO invoices, you should monitor slightly different metrics, including automated distribution level, lead-time waiting for approval, and the total lead-time.
Analyze Your Performance against Industry Benchmarks
You should consult your AP automation solutions provider to set up dashboards and reports that will offer complete visibility of your performance and process efficiency. In order to gauge the quality of your performance, you need to compare it to industry benchmarks and organizations in similar circumstances.
Focus on Areas of Improvement
Once you understand where you're going wrong, you will be capable of identifying the suppliers that cause maximum deviations, the ones that necessitate manual work for your AP department and approvers, and the approvers that take too long to approve invoices. Pinpointing the source of the problem allows you to draw up a solid action plan to tackle your performance issues. Every aspect of the plan must be detailed and clear for smooth execution.
Regular Monitoring of KPIs
The process of optimizing your AP invoice method happens to be a long-term commitment featuring constant improvements. It is recommended that your KPIs be measured on a quarterly basis for detecting issues in the process. You must then swiftly take action on those points, test, and measure once more.
Performance improvement is more of a process than a project. So how do you know when you should stop improving? Benchmarking comes in handy here and shows that as long as you continue to perform less than average on major KPIs, there will always be room for improvement. Get in touch with us to explore the subject of AP automation and process health checks further.