The latest update of the Accounts Payable Productivity Index (APPI)* shows that investments in AP process automation can be very worthwhile. The top-performers in the index (organizations with top-quartile scores for both efficiency and effectiveness) are gaining ground in their efforts to get suppliers to submit invoices electronically. As acquiescence grows, the pace of process innovation picks up, leading to stronger and stronger management of working capital.
According to the APPI report, the low-cost, high-speed, and high-quality process owners are either expanding traditional forms of electronic data interchange (EDI) utilization, or they are embracing newer forms of e-invoice processing. Some are doing both.
The pay-off? Looking at the cost to process an invoice for payment, we see that the leaders spend 46 percent less than organizations in the middle of the pack. The top performers also have productivity metrics (invoices per AP full-time-equivalent employee) that are 60 percent higher than median performers. The winners also have an 11 percent edge in the percentage of available discounts that are taken and a 33 percent advantage in cycle time in days to resolve an invoice error.
Those are just a few of the nuggets contained in the latest APPI update. The report also describes operating practices that are common among top performers, including high utilization of:
-
Automated/evaluated receipt settlement (especially in manufacturing and products/goods-
intensive AP environments), -
Advanced data capture, document scanning, and optical character recognition for initial
digitization and conversion of paper invoices into electronic data, -
Rules-based automated workflow solutions to effectively manage the flow of electronic
invoice data and images through the organization for required approval and authorization for
payment.
Access the published index now.
*The APPI was developed by PRGX, an analytics and advisory services firm, in conjunction with The Institute of Financial Operations and APQC. The new edition of the APPI draws on data from 333 large organizations that participated in APQC’s AP Open Standards benchmarking survey. Submit your organization’s data confidentially and receive a customized report.