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In part 1 , part 2 and part 3 of the series, we saw the first three steps of building a winning case to implement an eInvoicing based AP automation solution.

The next step, spoken of in this blog, is to use benchmarking to focus on performance improvement opportunities.

STEP 4: BENCHMARKING ACCOUNTS PAYABLE OPERATIONS

Aggregating and analyzing data of commonly tracked AP benchmarks from a supplier portal not only provides a baseline for calculating savings opportunities but also drives operational improvements.

However, IOFM’s research finds that more than one-third (38.3%) of AP organizations do not benchmark their operations, and 46% do not track Key Performance Indicators (KPIs), for measuring individual and departmental performance.

Learn More: Merlin for AP Automation Software

The Hackett Group’s provides very relevant information for benchmarking your AP operations against the ‘world-class’ organizations. According to The Hackett Group Performance Study, 2015 (and still relevant today!), here are some of the key metrics to benchmark yourself against:

PERFORMANCE AREA	PEER GROUP	WORLD-CLASS
% of Suppliers Accounting for 80% of Invoice Volume	8%	4.5 %
% Invoice First-pass Match Rate	73%	90%
% Invoices Received Electronically	19%	70%
Days Payable Outstanding (DPO)	35	40
% On-time Invoice Payment	78%	90%
Cost per Invoice	$4.80	$2.27
Invoices per FTE	7,126	17,357
Early Payment Discount Taken as % of Available	78%	85%
Early Payment Discount Taken as % of Spend	0.002%	0.11%
Invoice – PO (days)	10.8	3
Invoice Cycle – Non-PO (days)	15.8	3

In the final and concluding part of this blog series, we will focus on the calculation of potential savings which an organization can capture by deploying a supplier eInvoicing portal.

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