KPIs and Metrics for Accounts Payable Manual Processes

Accounts Payable (AP) should be reporting on Key Performance Indicators (KPIs) to measure the efficiency of their processes.  KPIs can also determine issues within other departments that may impact Accounts Payable and Vendors.  Learn which key processes should be scrutinized, how to gather information to perform the analysis, how to interpret the results to identify the root cause of any issues, and how to identify the steps to be taken to reverse the trend of each KPI.  

KPIs are a great tool that should be in every AP Operations’ toolbox.  Time is needed to pull together the KPI reports but once a company identifies what to measure and the details needed to perform the research, reporting can be created within the enterprise resource planning (ERP) system, or other accounting system, greatly reducing the time needed to perform the work.  Additionally, the relatively small amount of time needed to perform the analysis will bring great benefits to the company as a whole. You will learn about the benefits of each KPI as it is presented. 

In this course, “manual” processing will be covered.  Here are a few examples of KPIs that will be covered:

• Volumes of invoices received by Vendor per Month – used to identify fluctuations that may impact Vendor Relationships.
• Invoices volumes processed by each AP team member – to measure each person’s productivity month over month.
• Paid on Time reporting – late payment of invoices could have adverse effects to Vendor and Customer relationships.
• Prompt Payment Discounts taken compared to discounts available – what is causing lost discounts?

KPIs for operations using AP Automation Tools can be quite different and will be covered in a separate program.