Improving your accounts payable (AP) performance takes more than a one-and-done effort. Robust process governance, cloud-based technology, and the right delivery structures can help organizations achieve greater AP productivity. 

APQC recommends these three critical steps that your organization can take to improve its AP performance:

1. Establish AP Policies and Procedures 

There is no better way to slow down AP than submitting invoices that still require approval. For example, if your organization requires CFO approval of all invoices over $25,000, then the submitting employees should ensure that all necessary approvals are obtained before the invoice reaches AP. Otherwise, AP personnel must track down the leadership approvals for invoices exceeding a specific dollar amount, which is a guaranteed time-drain on AP’s productivity. More broadly, set and enforce policies for AP to keep process variations and exceptions to a minimum. 

2. Leverage an Online Vendor Portal 

For many organizations, using a vendor portal (or a supplier portal) is imperative for processing high volumes of invoices. Among their many benefits both for AP teams and vendors or suppliers, vendor portals:

• Provide suppliers with visibility into invoice and payment status; 
• enable suppliers to update payment information securely; 
• facilitate virtual payment methods while reducing the need for paper checks;
• create a paperwork trail of each transaction for auditing purposes and 
• automatically flag suspicious transactions or payment requests to reduce fraud. 

Giving suppliers access to self-service options and visibility into the status of their invoices will free your AP team from fielding every invoice-related question, which will help drive greater efficiency and free up time for more value-added work.

3. Consider Moving AP to Shared Services 

Large and globally distributed organizations can significantly enhance efficiency by centralizing high-volume processes like AP in a shared services center. This approach not only reduces costs (as each business unit doesn't need its own team or employees for the process) but also improves speed and accuracy. Shared service teams develop expertise in the process, leading to greater efficiency and effectiveness. 

If a shared service center doesn’t make sense for your organization (for example, because the volume of transactions you process isn’t high enough to make the investment worthwhile), it’s still important to identify a process owner who will be responsible and accountable for the process. Set up governance structures and a regular review cadence for AP to ensure that the process is standardized to the greatest extent possible and is not neglected for improvement opportunities.

See how your AP performance compares to others by examining the average number of invoices processed for each full-time equivalent employee (FTE) who carries out the AP process.

Download APQC’s Invoice Processing and Greater Productivity.