To develop a best-in-class accounts payable (AP) department, an organisation must analyse its current processes and procedures and adjust them to make them more efficient, strategic and cost-effective.
In its The State of ePayables 2021 report, Ardent Partners identified three benchmarks that AP departments should be analysing to pinpoint areas where they are performing well and determine where changes need to be made. The first is cost and time. Despite today’s AP technology, businesses are taking too long to process invoices and it’s costing them too much money. The average invoice processing cost is $9.25, and if you multiply that by the hundreds or thousands of invoices, it adds up fast.
The second benchmark is Covid-fuelled digitisation. One by-product of Covid-19 was the transition to remote working, which forced more organisations than ever before to embrace digitisation and automation to remain operational. And the final benchmark is target exceptions, which are one of the biggest challenges AP teams face. Dealing with exceptions is time consuming for staff, who are unable to focus on more strategic tasks, causing other AP benchmarks to falter.
By taking these benchmarks into account, AP departments can take steps towards delivering best-in-class performance, which Ardent Partners defines as the “20 per cent of enterprises with the lowest average invoice processing costs and shortest average invoice process cycle times”.
According to Ardent Partners, these AP departments experience several benefits by leveraging AP automation and e-payables technology (such as MetaViewer from Metafile Information Systems), including 80 per cent lower invoice processing costs. This is especially pertinent for businesses that are processing large volumes of invoices where the costs can quickly add up.
Another advantage is 73 per cent faster invoice-processing times. Invoice processing time is an essential key performance indicator for an organisation to monitor in order to gauge the effectiveness of the AP team and the technology it has implemented. In addition, best-in-class AP departments can achieve a 60 per cent lower invoice exception rate, which means teams spend less time hunting for information and filling gaps in data.
Keeping an eye on key benchmarks and bearing in mind the advantages of being best-in-class can help even more companies experience the benefits of e-payables technology.
Alyssa Putzer is marketing communications specialist at Metafile Information Systems
This article was originally published in the Autumn 2021 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.
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