The world of Accounts Payable (AP) is transforming, with best-in-class organizations leveraging technology and automation to maximize their efficiency and strategic capabilities. Here's what they're doing differently according to Ardent Partners' Accounts Payable Metrics that Matter in 2023 research.
- Lowering Invoice Processing Costs: Best-in-class companies are lowering their invoice processing costs by 76%, averaging $3.12 per invoice, a stark contrast to the $13.11 per invoice for their peers.
- Speeding up Invoice Processing Time: These top performers also process invoices 81% faster, taking just 3.7 days compared to the 19.4 days seen in other AP departments. This speed boosts their ability to capture early payment discounts and manage working capital better.
- Increasing Touchless Processing: Best-in-class organizations report a 2.2x higher rate of touchless invoice processing, bypassing human intervention to create an efficient and speedy workflow.
- Lowering Invoice Exception Rates: They also significantly reduce invoice exception rates, with only 11.8% of their invoices flagged for issues – less than half the rate of their peers.
- Adopting Electronic Invoicing: A whopping 88% of best-in-class AP groups have adopted eInvoicing, which is 2.5 times more common here than in other businesses. This adoption helps them avoid challenges associated with processing paper invoices.
- Reducing Time Spent on Inquiries: Top AP organizations spend nearly 50% less time responding to inquiries, freeing up their staff for more strategic, value-added activities.
- Leveraging ePayables Technology: The leading businesses adopt ePayable solutions between 46% and 260% more than other AP groups, demonstrating the transformative impact of technology.
- Measuring Key AP Metrics: Finally, these high-performing enterprises are 73% more likely to measure key AP productivity and financial metrics, helping them constantly improve their performance.
As AP's role continues to evolve, it's clear that mastering AP operations involves a lot more than just transactional proficiency. It requires a comprehensive understanding of the P2P process, leading fraud detection, expanding core AP reporting and analysis, and adopting a customer service mindset. All these skills and competencies ensure AP teams' value and relevance as they directly impact cash flow, working capital, and supplier relationships. With greater access to stakeholders and larger budgets for digital transformation, the AP function is newly empowered, and poised for continued growth in 2023 and beyond.