5 Accounts Payable KPIs Worth Tracking

Is your accounts payable (AP) department being tasked to better monitor, track and improve key performance indicators (KPIs)?

Then you’re well aware that it can be a daunting task. Why? There are an infinite number of KPIs that you could track to measure AP performance. Deciding which accounts payable KPIs to track depends on your organization’s and department’s goals. However, these KPIs are a great place to start!

5 Accounts Payable KPIs You Should Be Tracking

  1. Cost to process a single invoice
    As much as you’d enjoy it, your suppliers aren’t just going to stop wanting payments. Processing invoices (especially manually) can be expensive when accounting for costs associated with routing, copying and follow-up, staff salaries, managerial overhead and IT support.
    .
    What does the data say? PayStream Advisors reported that the average, all-inclusive cost to process an invoice manually is $40.70! Ouch!
    .
  2. Time to process a single invoice
    People say time is money for a reason, and accounts payable is no exception. The time it takes to process an invoice is a great KPI to track for determining how much value an AP department is either wasting or adding. Longer invoice processing times often lead to missed vendor discounts, late payment fees, low staff productivity, and supplier dissatisfaction.
    .
    What does the data say? Ardent Partners reported the market average for processing a single invoice is 11.4 days. Yikes…
    .
  3. Number of invoices processed per day per AP clerk
    Measuring staff productivity is a great way to pinpoint exactly which suppliers are causing your staff the most problems. This can be calculated in three steps:

    1. Take the number of invoices processed per month.
    2. Divide by the number of FTEs who process them.
    3. Factor in who’s responsible for what aspects.

    What does the data say? Ok, so there’s not a definitive market average for this one because of all the different factors that play into the calculation. However, once you begin tracking your AP staff’s productivity, you’ll easily be able to see who your top processors are!

  4. Percentage of invoices linked to a purchase order (PO)
    Invoice validation is a key step in AP invoice processing which is why delays, like information not matching PO data, are concerning. Typically, the higher the percentage of invoices linked to a PO, the faster and less expensive your AP process will be.
    .
    What does the data say? Ardent Partners reported the market average for percentage of invoices linked to a PO is 58.9%.
    .
  5. Invoice exception rate
    The amount of time and resources required to manage invoice exceptions is a major reason why many AP departments underperform. Exceptions are often caused by discrepancies in PO and invoice data, missing/incorrect POs, and bottlenecks in the approval workflow.
    .
    What does the data say? Ardent Partners reports the market average for invoice exception rates is 17.2%

Measuring KPIs with Real-Time Analytics and Dashboards

Just as important as knowing which accounts payable KPIs to track, is having the technology in place to gather, sort and distribute the data you’re collecting. A robust AP automation solution should provide you with real-time analytics and the dashboards you need to make tracking your KPIs easy.

Want to learn more about accounts payable KPIs and dashboards? Download this eBook, 5 Accounts Payable KPIs Worth Tracking: Maximize Results with Real-Time Analytics & Dashboards.

Embracing Digital Transformation

 

The global marketplace across industries is rapidly becoming more and more complex. Technology is enabling swift momentum in the economy and, like it or not, it’s here to stay. Contrary to the viewpoint of many legacy organizations, technology is intended to make people’s lives easier and more efficient. With so many apps and programs, many organizations find the hardest step is knowing where to start.

Put the customer first.

Companies have seen the most rapid and immediate financial gains by putting customer experience at the forefront of their digital transformation strategy. Design your strategy to give the customer what they want. This often includes:

  • A user-friendly, straightforward interface personalized for their needs
  • Self-service options for quick and easy access to information
  • 24/7 availability and mobile flexibility
  • Proactive engagement from vendors

Why does it matter?

Change can be hard — no one said kicking-off a customer experience initiative that centers on digital transformation would be easy. But here are cold-hard facts to give that extra push:

  • $84 billion is lost annually by American businesses due to mismanaged customer interactions
  • 67% of customer churn is preventable if the customer issue is resolved at the first engagement
  • By 2020, customer experience will overtake price and product as the key brand differentiator

How do you get there?

Successful digital transformations happen with transparent collaboration, thoughtful planning and diverse stakeholder input. We’ve compiled our ideas on this topic in the white paper: Aligning People, Process & Technology: An Action Plan for Customer Service Excellence.

Be sure to share your thoughts below in the comments section!

  1. 2011 Global Customer Service Barometer: Market Comparison of Findings, (2011). Echo Research.
  2. ThinkJar annual survey and associated ThinkJar research, 2016
  3. Walker Information

Meet James – He’s a visionary for supply chain efficiency.

Accurate demand planning and logistics require real-time insight that you won’t find in manual operations — which is why supply chain leaders like James are turning to order management automation which offers:

  • Upstream order visibility with real-time metrics
  • Increased order processing accuracy & speed
  • Greater collaboration between staff & suppliers

Invest 2 minutes to see how your supply chain can benefit from an automation solution – watch now!

4 Reasons Businesses Must Transform Accounts Payable with Digital Technologies

No matter what future you see ahead for your accounts payable (AP) organisation, one thing is sure: If your organisation is going to succeed in the emerging digital trade and commerce environment, it will need to process transactions more efficiently than ever, have faster access to AP information, and be able to act upon information and identify opportunities more quickly. This will require AP organisations to transform their processes with digital technologies. Accounts payable departments that delay

Accounts payable departments that delay their digital transformation initiatives risk falling behind their peers and putting
their business at a competitive disadvantage in the global business
landscape. This white paper details the growth of digital technologies, the dangers of relying on manual and semi-automated AP payable processes, the benefits of using digital technologies in AP, and how effective change management ensures the success of digital transformation efforts.

Digital Transformation

To compete in the emerging global economy, businesses must transform their corporate strategies to embrace digital. Indeed, digital transformation is a high priority in the boardroom. Eighty-five percent of businesses have an established digital transformation function as a focus for innovation, per Ernst & Young. Eighty-seven percent of businesses surveyed by Ernst & Young are explicitly considering digital transformation in their capital
allocation planning for the next two to three years.
Best-in-class organisations are already digitising their business processes.

The number one digital transformation strategy is to promote collaboration across the organization, as well as between multiple technologies, in support of business processes, Aberdeen Group reports. Organisations also are striving for greater flexibility in their business processes, more intelligent workflows, simplified and more efficient business processes, faster cycle times, and fewer paper-based business processes.

Some of the technologies organisations are using as part of their
transformation initiatives include:

• Automation
• Mobile and cloud computing
• Artificial intelligence
• Robotic process automation
• The Internet of Things

This transformation is evolving financial systems and processes.

Forty-eight percent of senior finance executives believe that digital
technologies will fundamentally change everything that finance does, a recent study from Accenture Strategy reported. CFOs are increasingly relying on digital technologies for security threat intelligence, blockchain, and artificial
intelligence. Buoyed by greater-than-expected returns from these digital investments, CFOs also are incorporating digital into their organisations at large to drive transformational change, Accenture Strategy reports.

Digital transformation is also on the AP department’s agenda. Most
payables departments are investing in process standardisation and
automation, per a recent IOFM study.

The Dangers of Manual Processing

Accounts payable earned a dubious trifecta in IOFM’s recent survey ofcontrollers: Payables topped the lists as the most time-consuming, laborious, and paper-intensive finance and administration function, ahead of activities such as accounts receivable (AR), payroll, tax, and audit and reporting.

In fact, AP received nearly twice as many votes from controllers as the most time- and labor-intensive finance and administration function than the next highest-ranked function.
Efforts to improve AP processes have historically been undermined by the double-whammy of high paper volumes and a lack of automation to facilitate timely payments and working capital optimisation. Most departments have been forced to rely on sub-optimal manual processes, reinforcing the longheld perception that AP is a tactical, back-office function.

Manually processing paper invoices results in:

• Costly and error-prone keying of invoice information
• Lost or misplaced invoices
• Long approval and exception resolution cycles (which result in late
fees and missed discounts)
• Compliance and security risks
• High paper storage and retrieval costs
• Delays uploading data on approved invoices to downstream systems
• Time-consuming supplier inquiries regarding invoice and
payment status
• Difficulty implementing operational best practices

The results of IOFM’s 2016 AP Key Performance Indicators Study illustrate the inefficiencies of manual invoice processing. Of the 69 full-time equivalents (FTEs) employed in AP departments (on average across all locations), all but one FTE performs invoice data-entry.

Manual processes also increase the chance of payment errors. Thirty nine percent of businesses report that duplicate payments and overpayments represent more than 1 percent of their payments. Worse, duplicate payments and over-payments account for 2 percent or more of all payments at 14 percent of the businesses surveyed for IOFM’s 2016 AP Key Performance Indicators Study. A rule of thumb is that a duplicate
payment rate over 0.5 percent indicates weak controls, or that the master vendor file needs a good weeding out, IOFM noted in its AP Department Benchmark and Analysis study.

Additionally, paper processes limit visibility into invoice information — a
top AP concern of 7 percent of businesses surveyed by IOFM. In a paper based environment, critical information is not captured, data is poorly organised, information is not timely, systems are not well-integrated, and decision-makers cannot access key variables. Moreover, it is hard for staff to track the status of invoices and other documents in a paper-based environment and to ensure that the appropriate individuals have approved documents in a timely manner. Paper invoices can sit for days on an individual’s desk, get stuck in inter-office mail awaiting approval, or become lost or misfiled.

Manual processes take significantly longer than their digital counterparts. Thirty-seven percent of organizations surveyed by Aberdeen Group point to the time it takes to complete financial processes, along with the demands they place on internal resources, as a leading pressure they face.

Look What You Make Organizations Do, Automation

On Friday, Taylor Swift dropped a music video for her newest song “Look What You Made Me Do.” Whether or not you like her or the song, you can’t deny its current success — it’s broken records for the most viewed YouTube video in the first 24 hours, racking up more than 40 million views.

The song seems to hit back at less-than-friendly media coverage she’s experienced recently, talking about how she was forced to get smarter and “harder”. She’s had to adapt, just like companies in competitive landscapes where they must evolve to survive.

One way businesses evolve is by implementing robotic process automation solution. When utilizing a best-in-class solution, it requires them to evaluate and improve their processes. It makes them better.

Look what you did, automation

“Esker has made everything much more efficient. We don’t have any of the problems we were having before.” – Piedmont Behavioral Healthcare

“Now, all we have to do is snap our fingers to find an archived invoice. Esker’s mobile invoice application has made approvals so much easier for our managers. No one at CARSO will ever go back to how it used to be!” – CARSO Group

“You can always tell you’ve made a good decision when it becomes integral to your daily operation.” – NationsBank

What automation helps companies do

Organizations leveraging an automation solution find themselves becoming:

  • Faster
    From quicker processing with electronic documentation to speedy customer follow-up, everything moves faster when you have the right solution in place.
  • Accurate
    Machine learning and other intelligent technologies help ensure that data is accurately extracted from documents every time.
  • Customer focused
    When staff is bogged down by manual tasks, the customer experience suffers. An automation solution frees them up to focus on more important things, like your customers.
  • Less wasteful
    Rather than printing documents and relying on paper and related materials (like toner), an electronic solution cuts the crap — minimizing waste as well as soft and hard costs.
  • Compliant
    With the transfer of business documents now highly regulated, automation allows companies to meet compliance requirements whether they’re doing business in the U.S. or overseas.
  • Integrated
    Rather than using multiple systems that can’t communicate, the right solution will integrate with existing infrastructure and unify process workflow rather than fragmenting it.

Whether it’s evaluating their process, making a plan for improvement, or creating a more effective process, automation makes organizations do a lot of [good] things. What has it helped your company do?

Want More Impressive Results from Your AP Department? Embrace Digital Transformation

 

 

Earlier this week, the entire country was caught up in a spectacle not seen in the contiguous United States in nearly four decades. The moon passed between the earth and sun to create an awe-inspiring natural phenomenon known as a total solar eclipse.

There were festivals, viewing parties and even weddings held to celebrate the rare celestial occurrence. Small towns in the path of totality were flooded by outsiders dying to get the full breathtaking experience of this seemingly once-in-a-lifetime event.

It was hard to ignore. And the end result was inspiring; undeniable.

If only the average accounts payable (AP) department could produce such impressive, indubitable results for all to see and appreciate …

Raising your expectations of AP

Let’s be clear: The results of a solar eclipse and the results of an AP solution aren’t in the same galaxy. The point is, many of today’s AP departments are selling themselves short by not expecting more out of the performance of their vendor invoicing process.

A lot of businesses think having an ERP system in place is enough to create a best-in-class AP operation. However, ERP systems don’t address many of the manual pains that inhibit AP efficiency and effective cash management, including: keying in invoice data into the ERP, tracking down approvers around the office for signatures, manually filing invoices and more. Furthermore, all of these error-prone, non-value added tasks are being performed by well-paid and highly educated AP staff members.

The effects are fairly predictable: The business ends up paying more for less, collaboration between other purchase-to-pay (P2P) processes suffer, staff turnover rates increase, strategic supplier relationships become damaged, and opportunities for new business dry up.

Embracing digital transformation

Sticking to the status quo cannot produce the kind of results today’s businesses need out of their AP department. The c-suite wants to be shown in clear and certain terms how AP is contributing to an improved bottom line — not told.

If you’re looking for a show-me solution to dramatically improve your AP performance, businesses no longer have to settle for a budget-breaking alternative to what they already have in place. This 12-page eBook explores how four different companies embraced digital transformation in their AP department, and highlights the truly amazing results of accounts payable automation.

There’s more …

Want to learn more about the benefits of making a digital transformation in AP? Download the full eBook, 4 Amazing Esker Launches: Accounts Payable Automation Stories with Awe-Inspiring Results to discover how these four companies created new competitive advantages thanks to automated AP invoicing solutions.

Building a Successful Business Case for AP Automation

Accounts payable (AP) and finance managers are aware of the advantages that AP automation has to offer. But it’s never as easy as simply selecting a vendor and implementing a solution. Before an automated AP invoicing project can hit the ground running, one critical hurdle must be cleared — getting buy-in from upper management and other key stakeholders.

The good news is, despite upper management consistently being cited as the biggest obstacle to AP automation, they understand the general benefits. According to survey results compiled by the Institute of Finance & Management (IOFM), the c-suite believes AP would benefit from automation more than any other finance/administrative function.

Check out this SlideShare to learn how to enable AP and finance managers to embrace their responsibility and equip themselves with the knowledge and strategies needed to make AP automation a reality. By better understanding how automated AP invoicing works, AP and finance managers can cite key performance indicators (KPIs) and analytics to more effectively persuade their organization’s top decision makers.

 

1. Finance Executive Survey: Priorities, Challenges, and Technologies for the Year Ahead, 2014. Institute of Finance & Management.

How to Start Building a Successful Customer Experience Program

By the year 2020, customer experience will overtake price and quality as the key brand differentiator. In other words, brands that don’t work on improving their customer experience will be left behind.

Customer experience is more than a trend or buzzword — it will play a pivotal role in the future of marketing and has an insightful ability to predict where a company will be 5-10 years down the line. What should you be doing, if anything to prepare for this change?

First, what is customer experience?

On a basic level, customer experience (CX) refers to how a customer perceives their interactions with your company. How does your customer feel at every touchpoint they have with you, from marketing to sales to support? CX is ultimately defined by the consumer, which means businesses need to actively adapt and set themselves up to exceed expectations.

Should you be investing in this?

Joe Hanousek, Esker’s Customer Experience Manager, believes that every company needs to be tracking their customer touchpoints and working towards continually improving that process. He often says that: “Seventy percent of senior executives in companies believe that CX is important. In my opinion, the other 30 percent shouldn’t be executives.” So much of the B2B focus is on lead generation instead of improving customer experience, although most people are well aware that it is less expensive to keep existing customers than it is to acquire new ones. Companies mistakenly start looking into customer experience as a last resort once they’re suffering, but customer experience is best as a proactive approach, taken when business is growing versus lagging behind. The graph below shows just how valuable an investment in improving customer experience could be.

How do you begin?

If you’re just getting ready to work on improving customer experience, aim for C-level sponsorship. It won’t go very far unless there are people at the top behind it, so do the research you need to convince someone to back you up. Most executives are aware of the importance of CX, but still aren’t taking active steps to improve upon it. If you haven’t already started in a few years, it’ll be too late.

Next, be sure you’re ready to invest a significant amount of time and human resources into building a solid customer experience program. At Esker, the process took a full year to go from conception to having a Customer Experience manager and a team in place. It’s a good idea to have at least one person fully devoted to customer experience and multiple people from different departments committed to being a part of the CX improvement process; otherwise, CX can easily become a task that is swept away on an already busy to-do list. This will also depend on executive buy-in, as far as whether the need to have a customer experience manager or team is understood.

Finally, it is important to communicate the goals of the customer experience program throughout the organizationEveryone should be on board and kept up to date. As Joe puts it: “It’s not C-Level people or managers that make customer experience better — it’s the staff working directly with them.” Educate, train and update all those who interact with customers at any level on what needs to be done to improve those important touchpoints.

The beginning stages of our customer experience journey.

Joe’s biggest recommendation for those starting to work in CX? Change your perspective. “It is not an area for problem customers to go to, but rather a way to prevent customers from ever having the problem in the first place,” he explained. As staff focus on offering solutions to immediate problems, the CX team should be looking into why those problems happened in the first place, and if there is anything that could be done to fix that.

Customer experience goes beyond customer satisfaction or happiness. A successful customer experience program will work to prevent problems before they arise, delighting your clients past the point of mere satisfaction. CX has become more of a trend in the past two years, but it is definitely here to stay for the long haul. If you have any questions about the process we went through to build our customer experience program at Esker, or about customer experience in general, leave a comment below and we will respond to you!

Success! Awe-inspiring Customer Results with Accounts Payable Automation

Are you sitting at your desk thinking of all the ways to improve your business? Ok, maybe you’re not at this exact moment but at some point, we all try to come up with ways to improve our businesses. After all, we want to impress the boss and see organizations succeed! One big step you can take to do so is through Accounts Payable Automation. AP Automation is an essential business process you don’t want to be without, and we have the results to prove it!

What can AP Automation do for you?

Many organizations are trying to improve their KPIs to keep up with best-in-class competitors by using benchmarks to improve supplier and employee satisfaction or track how their day-to-day operations are running. The big question to ask yourself before embarking on a major project is “Are we going to see the results we hope for and expect?” We know how important it is to be able to see how automation can truly affect your business, which is why we compiled four customers who are currently reaping the benefits of AP Automation. What are you waiting for? See the results for yourself and find out just how attainable the goals can be!

AP Automation Customers

If you are:

  • In the process of working on a business case for AP automation
  • Contemplating if automation is the right way to go
  • Wanting to see if the results align with your business goals
  • Interested in seeing what all the hype is about automation and simply what other companies are doing

this piece is for you! You can download your own copy today and see some awe-inspiring results of AP Automation.

Don’t miss this opportunity to see firsthand how impactful automation has been for our customer’s Farmland, Albemarle, San Benedetto and Austin Powder, and how it can do the same for you! Click on the download below to take off on the journey towards an easier and more efficient business process through AP Automation!

 

10 Eye-Opening Quotes About the Importance of Customer Service

 

  1. Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.
    Chip Bell
  1. In the world of Internet customer service, it’s important to remember your competitor is only one mouse click away.
    Doug Warner
  1. Kind words can be short and easy to speak, but their echoes are truly endless.
    Mother Teresa
  1. Customer service represents the heart of a brand in the hearts of its customers.
    Kate Nasser
  1. Quality is remembered long after the price is forgotten.
    Dale Carnegie
  1. Customer service shouldn’t just be a department, it should be the entire company.
    Tony Hsieh
  1. There is a big difference between a satisfied customer and a loyal customer. Never settle for ‘satisfied’.
    Shep Hyken
  1. It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.
    Henry Ford
  1. Although your customers won’t love you if you give bad service, your competitors will.
    Kate Zabriskie
  1. Courteous treatment will make a customer a walking advertisement.
    James Cash Penney