What Gets Measured, Gets Improved – Part 4

The Average Time to Approve an Invoice from Receipt to Payment

We are half-way through our 8 part series entitled “What Gets Measured, Gets Improved.” In this series we are discussing 8 KPI’s in the Accounting / Finance world in order to get clear measurements of what’s going on now in order to move forward with any strategic initiative…like AP automation.

Let’s summarize 1 – 3:

1. Number of Invoices Processed Per Person / Per day
2. The Average Cost to Process an Invoice (By Invoice Time)
3. Exception Invoices as a Percentage of Total Invoices

Now onto #4…

4. The Average Time to Approve an Invoice from Receipt to Payment

If you know how long it takes an invoice from the time it gets into the AP department to the time it is ready to pay can, then you will be able to identify where that invoice spends the most amount of time. Is the most time spent in data entry, approval or exception management? Once you know this information, you can then take the appropriate steps to shorten the invoice receipt-to-pay cycle. This is particularly important if you want to take advantage of Dynamic Discounting offered by suppliers as well as reduce late payment penalties.

Stay tuned as we discuss the remaining 5 KPI’s in this series!

Powered by IBM’s FileNet and Datacap technologies, our user-friendly applications help organizations reduce the average time  number of exeption invoices as a percentage of total invoices.