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For some companies, processing accounts payable is a time-consuming, detail-intensive function. For others, it’s a quick and easy task.
But before jumping to conclusions about your company’s relative process performance, take the time to view data through multiple lenses: intra-company, intra-industry, and cross-industry. Companies that take this holistic view of process benchmarks develop a rich baseline of data to help improve their finance operations.
This month’s metric, based on data from APQC’s benchmarking database, considers the total cost to process accounts payable, per invoice processed. The total cost of AP covers processing payments of operating expenses and other supplier charges, including the development of policies and procedures around processing of accounts payable and all operations.
The total cost to process accounts payable includes labor, systems, outsourcing, overhead, and other AP process costs. This metric is calculated by dividing the total cost to process AP by the total number of invoices processed by the business entity.
Of the 1,485 organizations reporting data on this measure to APQC’s database, the bottom 25% are spending $10 or more per invoice processed. (See graph below.) The best performers - those who rank among in the top 25% on this measure - can do the same task at a cost of $2.07 per invoice or less. That’s nearly five times less than the organizations in the bottom quartile. At the median are the...