Invoice Processing – Top KPIs & Recommendations

Charlotte Sutton
Charlotte Sutton,
As discussed in Part 1 of this blog, Accounts Payable (AP) often becomes a bottleneck for organisations, where manual, paper-based processes prove to be slow, costly, difficult to monitor and prone to error. 
We looked at the pain points in invoice automation and highlighted the top 15 questions you should ask about your current process. In this article, we share the most widely used key performance indicators by organisations when assessing invoice processing and provide recommendations for transforming AP from a back-office clerical function to a financial operation that can actually improve bottom-line business performance. 

Key Performance Indicators
  1. The total number of invoices per million of revenue
  2. The total number of invoice line items processed per Accounts Payable FTE
  3. The percentage of FTEs that are contracting employees
  4. The total number of invoices received from each supplier
  5. The percentage of invoices received from each supplier that is electronic
  6. The total number of transactions received from preferred suppliers
  7. The average number of line items per invoice received by supplier
  8. The average invoice value per supplier
  9. The total number of invoices linked to a purchase order or to a recurring invoice
  10. The total number of invoices covered by purchase order and Goods Receipt
  11. The total number of invoices received and matched by purchase order or contract
  12. The number of invoices that have not been processed or transferred to an accounting system
  13. The average length of time to approve an invoice
  14. The percentage of invoices which an Accounts Payable clerk has sent for approval or review against the total number of invoices
  15. The total value of invoices that are waiting for approval
  16. The total number of invoices which have been run through an OCR tool and on which no corrections or data are required to be added manually
  17. The average time that has passed between capturing invoice data and sending the invoice for approval
  18. The average time that has passed between capturing invoice data and releasing invoice for payment
  19. The percentage of invoices whose information has been corrected against the total received invoices
  20. The total number of invoices that the system processes by automated workflow
  21. The percentage of processed electronic invoices on which no data has been added or corrected
  22. The percentage of all error-free invoices that have been transferred to an accounting system
  23. The percentage of the total number of supplier enquiries against total number of invoices received
  24. The percentage of electronic invoices that are linked to a catalogue order
  25. The total number of invoices that have been returned or cancelled
  26. The total number of invoices covered by a predefined payment schedule
  27. The total number of invoices that have been transferred for payment after the due date
  28. The total of interest of lost early-payment discounts due to late payments
  29. Staff turnover rate in Accounts Payable
  30. Employee satisfaction rate in Accounts Payable
Take a hard look at how to:
  1. Create an end-to-end vision: to manage and control the entire process including monitoring of all transactions – reducing cycle times, bypassing process bottlenecks and resolving invoice backlogs.
  2. Streamline the inward paper process: use the latest range of integrated technologies to capture and centralise the receipt of all formats of inbound invoices.
  3. Support ease of use: with role specific interfaces, intelligent coding and personal archive for invoices based on flexible business rules.
  4. Minimise time and money spent on invoice handling: use automatic business rule coding and matching to minimise the need for time-consuming and repetitive invoice handling tasks.
  5. Automate invoice coding that is accurately set early in the purchase cycle: e.g. a draft requisition or PO based on who is requesting, what they are buying and department.
  6. Leverage straight-through-processing: eliminate the need for clean invoices to enter the routing and invoice approval workflow.
  7. Involve your suppliers in the process: provide suppliers with access to real-time order information, plus different technology choices to send invoices according to their capability and strategic value.
  8. Ensure corporate governance and compliance: put in place compliance controls e.g. approval rights management, full audit trail and versatile reporting tools.
  9. Obtain global versatility: with a multi-currency, multi-lingual, multi-company solution that can support centralised and decentralised structures and integrate with existing ERP and AP systems.
  10. Ensure continuous improvement: by adopting key performance indicators that enable your company to measure, monitor and improve your invoice automation process.
To find out more about unlocking the strategic value of Accounts Payable, visit the PROACTIS AP Automation page
Get in
an event