As a financial manager, you always want to stay on top of your game; therefore you need to monitor a few high-level Key Performance Indicators (KPIs). To avoid instances when businesses prioritize one KPI over the other, this observation should be done on a regular basis. Managers may, for example, prioritize a low-cost KPI over another KPI, such as high productivity, if sufficient monitoring is not done.
More than simply keeping track of how many invoices are past late isn’t enough to evaluate the performance of the AP team.
While the accounts payable department’s primary goal is to pay vendor invoices, there are a number of advantages to having a strategic approach to this process. Failure to take advantage of these benefits means your company will miss out on possibilities to enhance short-term cash flow, develop good vendor relationships, and generate more revenue.
So, how can KPIs help an Accounts Payable (AP) team? We break down the top 5 KPIs that leading AP teams use to influence strategic choices and why they credit them with unlocking growth in this blog.
5 KPI’s you need to keep in your tracking process
The time it consumes to process an invoice can reveal shortcomings in other AP processes, such as complex routing protocols, approval delays, and overworked AP resources.
Their first indication of their accounting team’s overall efficiency is to track the cost per invoice processed. They were able to uncover cost savings and scale their procedures by keeping a careful eye on this statistic.
AP employees spend over a quarter of their day on average managing and addressing invoice exceptions. Because of the repeated nature of this process, it’s easy for errors to occur and go without being visible to the eye; therefore keeping track of invoice exception rates can help you spot problems.
Invoices that aren’t related to a PO or that don’t match a PO slow down the process of approval. It could also indicate that purchases are being made without permission.
We are all aware that the budgeted amount does not always correspond to the actual amount. They have a clear picture of their current situation in relation to their financial goals for the month, year, or quarter by comparing budget vs actuals on a regular basis.
Get in touch
So, monitoring Key Performance Indicators (KPIs), each uniquely weighted to reflect what matters most for your business, is required to determine if your AP process is as successful as it could be. To ensure that your account payable automation is up to the mark, you must get in touch with the right team of experts for assistance in implementing an AP automation workflow.
We at DHRP, as one of the leading companies certified by Microsoft in Australia are willing to take every challenge that your firms face for AP automation Australia. All you need is to talk to us and work on the improved process of Accounts payable department in your company.
