Accounts payable efficiencies can always be improved upon by precisely measuring some of the key elements. Keeping a constant check on these indicators will help improve your accounts payable performance and provide some crucial data such that you can plan procurement and payment strategies around it.
Setting up your accounts payable on autopilot mode helps you to focus more on measuring key performance indicators without worrying about the procurement process.
Top 5 Key Performance Indicators of Account Payables
- Total Number of Invoices Received – Tracking the total number of invoices that are being received by the finance team is an important metric to be measured. This data will give you an estimation of the volume of work and allows you to set-up some baselines.
- Average Cost Involved in Processing each Invoice It measures the average working time it takes to process an invoice from when it is received to when it is paid and archived. This metric can help you in identifying those which tasks take the most time, providing the data about the time taken by the finance team to process each invoice.
- Average Invoice Exception Rate – Duplicate payments, overpayments, and other erroneous payments can be a huge drain on a company’s finances. This metric measures the number of erroneous payments made over a certain period of time, divided by the total number of invoices paid over the same period of time.
- Average Approval Time – It is always measured from the time of receiving of the receipt, to approve & pay each invoice. The need to measure this metric is because it’s very important to understand the time taken to approve each invoice.
- Touchless Processing Ratio – Percentage of invoices processed with no human intervention between receipt and the point where it is ready to be posted in the financial system (ERP).
How To Improvise On the Accounts Payable Metrics?
Gain a competitive edge over your business spending by leveraging technology and automating the laborious and repetitive tasks. Finance teams can become more efficient, more productive and more responsive to business needs with the help of accounts payable automation tool
With the help of an accounts payable automation tool like Finly, you can:
- Avoid the hassles of manual method of upload/download of payment instruction files and make bulk payments in just one-click
- Decrease the time taken to process multiple invoices and enable finance teams to take up data-driven decisions.
- Split payments and make vendor payouts and manage all your marketplace payouts to the vendor’s bank account and also, notify your vendors through emails & SMS.
- Keep your accounting software up-to-date with accurate data entry and reconcile your payments in real-time
- Run error-free and accurate account payables by eliminating the error-prone manual process of data entry.
- Decentralize accounts payable & scale efficiently by disbursing funds at any time, anywhere through Finly collect
- Onboard vendors through a hassle-free vendor empanelment experience
- Increase the efficiency of finance teams by streamlining communication & collaboration.