Percentage of discounts available that are taken

This measure calculates the percentage of available discounts that are taken. A discount is a reduction in the amount of an invoice/bill to be paid if the entire amount is paid within a specified time period. An example would be "2% ten, net 30," where paying an invoice within 10 days earns a 2% discount. An invoice (either electronic or hard copy) is a bill prepared by a seller of goods or services and submitted to the buyer. Generally, an invoice contains all pertinent information about the transaction including the date, price, quantity, item number, and credit terms. This measure is part of a set of Process Efficiency measures that help companies optimize their "process accounts payable (AP)" process by minimizing waste and refining resource consumption.

Benchmark Data

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Measure Category:
Process Efficiency
Measure ID:
101947
Total Sample Size:
1,496 All Companies
Performers:
25th
-
Median
-
75th
-
Key Performance
Indicator:
Yes

Compute this Measure

Units for this measure are percent.

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(Number of invoice line items that are paid within the discount period / Number of invoice line items received that offer a discount) * 100

Key Terms

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Process efficiency

Process efficiency represents how well a process converts its inputs into outputs. A process that converts 100% of the inputs into outputs without waste is more efficient than one that converts a similar amount of inputs into fewer outputs.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (7.3.1)

  • 9.6.1.1 - Verify AP pay file with purchase order vendor master file (10869)
  • 9.6.1.2 - Maintain/Manage electronic commerce (10870)
  • 9.6.1.3 - Audit invoices and key data in AP system (10871)
  • 9.6.1.4 - Approve payments (10872)
  • 9.6.1.5 - Process financial accruals and reversals (10873)
  • 9.6.1.6 - Process payables taxes (10874)
  • 9.6.1.7 - Research/Resolve payable exceptions (10875)
  • 9.6.1.8 - Process payments (10876)
  • 9.6.1.9 - Respond to AP inquiries (10877)
  • 9.6.1.10 - Retain records (10878)
  • 9.6.1.11 - Adjust accounting records (10879)