![]() “According to 2021’s State of ePayables Report from Ardent Partners”, organizations spend $9.25 on average to process a single invoice. ![]() In addition to accounting for staff costs, there are several other major contributors to cost per invoice: ![]() The added consideration of human labor costs can radically increase a company’s overall processing cost per invoice. Also, the cost per invoice must include the cost of time spent in the accounts payable process by business users. A company’s cost per invoice may appear deceptively low, simply because they haven’t considered the hidden costs that are hurting their profit margins.įor example, a company with a highly manual or paper-based invoice process should consider the labor and operational costs of time-consuming, lengthy processes, and the increased risk of human error presented by manual invoice processing. The cost per invoice is most often defined as the total average cost of processing one invoice through the organization, but can vary among businesses depending on the factors included in this calculation. Accounts payable KPI #1: cost per invoice In the case of organizational restructuring, mergers and acquisitions, or new technology implementation, it is critical to have the relevant accounts payable KPIs in place to provide baseline metrics and to measure the impact of such changes on the AP process. KPIs should be measured on a regular basis, at least quarterly, to ensure the accounts payable process is in line with goals and to identify areas of improvement. A good AP KPI should be specific, agreed upon by all project members, and time-bound. While modern finance executives are aware of the term Key Performance Indicators, as an overview, a KPI for accounts payable should be a quantifiable data point closely tied to the success of a specific business project. Business owners must identify metrics and measure performance against these benchmarks to avoid things falling through the cracks.” Nearly all business functions use Key Performance Indicators (KPIs) to measure their efficiency and contribution to the overall business success. "Accounts payable is a process that features many moving parts, potentially labor-intensive steps, and multiple people across an organization.
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