The Benefits of Automating Accounts Payable KPI Tracking

Introduction

Accounts payable (AP) is the process of dealing with bills, invoices, and other payments that need to be paid by a business. Companies using accounts payable employ a wide array of strategies to efficiently manage accounts in order to keep expenses low and maintain satisfactory vendor relationships. Key Performance Indicators (KPIs) are metrics used to monitor and measure accounts payable performance. Automating KPI tracking can provide a set of cost savings, time savings, improved accuracy, and more.

In this blog post, we will discuss the following topics:

• Definition of Accounts Payable

• Overview of Key Performance Indicators (KPIs)

• Overview of Automated KPI Tracking

Cost Savings

Automating accounts payable KPI tracking offers several cost savings opportunities for businesses. By automating processes and eliminating manual labor, companies are able to save money in increased efficiency, resource utilization, and training costs.

Increased Efficiency

Making use of automated accounts payable KPI tracking has the potential to reduce operating costs significantly by increasing efficiency. By organically tracking vendor invoices, payments and aging reports, businesses can easily identify root cause issues that can be addressed to improve efficiency. The automated system can be customized to track key performance indicators, such as invoice processing time, payment compliance and process monitoring to promote streamlined operations.

Reduction in Resources

Automated accounts payable KPI tracking systems help eliminate process redundancies and streamline compliance audits, which reduces the need for additional resources and personnel. Organizations can reduce the amount of time taken to complete accounts payable tasks with real-time role-based access control and automation. Automation allows businesses to streamline the accounts payable process so that resources won’t be wasted by running individual reports or manually completing routine processes.

Reduction in Training Cost

Another benefit of automated accounts payable KPI tracking is the reduced cost associated with training new hires. Automatic tracking and alert systems allow users to be immediately trained in the process, setting alerts for important tasks and automating manual tasks to improve efficiency. Automation also eliminates the need for extensive training for personnel, saving businesses time and money.

• Increased efficiency
• Reduction in resources
• Reduction in training cost

Improved Accuracy

Accounts payable automation brings improved accuracy with its data capture, calculation and real-time data availability. Automated accounts payable helps to leverage data to gain better insights and move beyond isolated transactions.

Automated Data Capture

With automated accounts payable, data is quickly and accurately captured in one central repository, eliminating the need for manual data entry. Automation also captures supplier contact information, invoice formats, specific deadlines, payment preferences, and more. This helps to ensure accurate data entry, which leads to greater accuracy, transparency, and faster processing.

Automated Calculation

Automated accounts payable solutions can also automate the calculation of invoice data and account balances. This eliminates the need for manual calculations which reduces errors and provides more accurate results. Automated data calculation also reduces the risk of inconsistencies, miscalculations, and incorrect invoicing.

Real-Time Data Availability

Real-time data is available at the click of a button with automated accounts payable solutions. This eliminates the need to compile spreadsheets and manually track data trends. Further, real-time data availability provides a clear insight into trends and data patterns, allowing businesses to make more informed decisions. Additionally, real-time data availability can be used to identify any discrepancies that can be easily managed and corrected.

Data Visualization

Accounts payable KPIs can be easily tracked when automated, allowing measurement of performance through more precise visualization of the data. This helps in a variety of ways, allowing greater understanding, identification of risks and opportunities, and greater efficiency.

Increased Clarity

When accounts payable KPIs are automated and visualized, decisions can be made quickly and accurately. Since the data is provided in an easy to determine graph or chart, analysis takes less time and is much more efficient. Furthermore, it makes the data easier to read and understand, allowing businesses to identify any issues or risks quickly and efficiently.

Improved Analysis and Insight

Automating accounts payable KPI tracking and visualizing the data helps improve analysis, leading to greater insight into the performance and operations of the accounts payable process. With better understanding of the accounts payable KPIs, businesses are able to identify potential risks and opportunities, allowing them to take proactive actions in order to improve performance.

Increased Efficiency

Visualizing the accounts payable KPIs allows businesses to measure, track, and monitor performance in real-time. This makes the process more efficient, as businesses are able to quickly pinpoint where any issues or delays might be occurring and make adjustments accordingly. Improved accuracy and speed of measurement help businesses streamline the accounts payable process, reducing costs and increasing efficiency.

5. Increased Compliance

Organizations face a myriad of regulatory compliance requirements, both internally and externally. Automating accounts payable (AP) KPI tracking can help organizations easily meet these compliance requirements—resulting in fewer compliance issues and the avoidance of costly fines.

a. Easier to Meet Regulatory Compliance Requirements

Automating AP KPI tracking makes it much easier for organizations to comply with regulations that are in place. Pre-set reporting criteria ensures that data is captured and analyzed regularly and accurately, and makes it easier to automatically generate reports. This eliminates manual data entry and manipulation, which can not only introduce errors, but also increases the chance of incorrect data being used to satisfy the compliance requirement.

b. Avoidance of Compliance Fines

Failing to meet compliance requirements can result in fines and other penalties. Automating AP KPI tracking helps to ensure compliance is maintained, reducing the risk of hefty fines. In addition, the automated function can alert a user when changes are needed to comply with regulatory changes or to update processes or deadlines.

c. Automated Auditing Can Reduce Compliance Issues

Data collected through automated AP KPI tracking can be used to measure the accuracy of transactions and identify opportunities for improvement. Automated auditing also helps to ensure that manual tasks are performed properly and that errors are minimized. Automated auditing can significantly reduce the time required to audit accounts payable data, helping organizations to effectively stay on top of compliance requirements.

Scalability

Automating accounts payable KPI tracking gives businesses the scalability they need to increase efficiency and improve financial management. Automating can make it easier to coordinate with third party vendors, track multiple KPIs and accounts, and track complex accounts.

Easier Coordination with Third Party Vendors

With automated accounts payable KPI tracking, businesses can manage vendor contracts more efficiently. This helps to streamline the coordination process with third party vendors as all the data needed for payment processing is easily available when needed. In addition, automated tracking can help identify any discrepancies between payments due and payments received, allowing businesses to resolve and manage any issues quickly and accurately.

Ability to Track Multiple KPIs and Accounts

With automated accounts payable KPI tracking, businesses can easily monitor and assess their performance against multiple KPIs, such as average payment time, overdue payment rate, and average balance. This provides insight into how well accounts payable processes are working, and helps businesses adjust and adjust their processes as needed to improve their efficiency and financial performance.

Ability to Track Complex Accounts

Automating accounts payable KPI tracking also allows businesses to track their accounts more effectively. This includes tracking complex accounts, such as international payments and multiple currencies. Automation makes it easier to track and monitor these accounts, allowing businesses to ensure that all payments are properly processed, and any discrepancies are identified and resolved without delays.

By automating accounts payable KPI tracking, businesses can take advantage of the scalability and flexibility these tools offer, helping to make their processes more efficient and their overall financial performance better.

Conclusion

Tracking Key Performance Indicators (KPIs) within the Accounts Payable (AP) department is essential in establishing a successful operation. Automating AP KPI tracking offers rapid, concise, and precise data about critical performance areas and the corresponding KPIs. The benefits of automating the tracking of these essential KPIs are numerous and far reaching.

Summary of Benefits

Automating AP KPI tracking provides a number of benefits that aid in creating an efficient and successful AP department. Automation removes manual labor, reducing the potential for errors within critical processes. Data accuracy and availability are also improved significantly. Automation can measure KPIs in real-time and support an overall financial strategy.

Summary of Advantages of Automated KPI Tracking

The advantages of automated KPI tracking can equate to higher revenue through reduced operational costs, improved accuracy, and the ability to forecast future financial performance. Automation eliminates recurring manual labor, saving time and money. Automated KPI tracking also reduces processing time and improves data accuracy. This in turn enables organizations to analyze and make data-driven decisions in a more efficient way.

Final Call to Action

Organizations that desire improved efficiencies, reduced expenses and the ability to accurately forecast their financial performance, should consider automating their accounts payable KPItracking. Automated tracking streamlines the process of measuring, monitoring, and optimizing operational performance for overall success. Automation enables access to real-time, accurate KPI data that can provide valuable insights into a business process’s overall performance.