A large number of companies are yet to embrace the AP automation process, which means paper processing is still rampant. What these companies fail to understand is that the automation system can help them get a clear idea of the accounts payables based on which their Chief Financial Officers (CFOs) can strategically plan the future of the organizations. However, a 2013 study conducted by the Institute of Financial Operations presents a silver lining to the whole situation. It reveals that 75.3 percent of businesses are moving towards an electronic accounting system. Any organization that has taken the AP ‘leap’ knows that this initiative helps them track their performance quickly. Moreover, reports are generated based on the key performance indicators (KPIs) that further help companies expand.
Major KPIs for AP Process
Undoubtedly, the data provided by AP automation offer impressive information about your business; but if it is not put into use, collating the data makes no sense. In order to evaluate the performance of your business, you can depend on the following KPIs. Taking a second look at these will also allow you to analyze if your existing system is really working.
Tracking the electronic invoices: These are quicker and cheaper to process. You need to calculate the total percentage of e-invoices on the basis of the percentage of suppliers sending them.
Tracking the status of the suppliers’ e-invoices: It is essential for you to on-board the suppliers into the automated system. Study the results and make necessary changes if you don’t see much progress.
Tracking the number of processed invoices by the operator: The numbers will be much more in an automated system when compared to a manual set-up. Studying your staff members’ course of action and identifying the types of invoices they are specialized in handling will give you a clearer idea about the entire process.
Tracking the average cost to process an invoice: Once you know this, you can make necessary modifications to control expenses.
Addressing duplicate invoices: Tracking the time and money wasted in dealing with duplicate payments and other payment errors will enable you to identify the loopholes in the process. This, in turn, will enable you to take the steps needed to ensure consistency.
Besides these, there are many other indicators to understand the performance of the AP process in an organization. However, it is important to implement these changes and track how the business is improving over the time. If you are considering adopting AP automation, contact us today.