Ardent Partners is pleased to present its newest custom research report, How AP Can Leverage Data to Make an Impact, sponsored by Esker. Interested readers can download the report for free by clicking here (registration required).
Access to accurate, real-time data can be a game changer to Finance and Accounts Payable (“AP”) teams operating in today’s fast-paced business world. Of course, simply having the data is a first step; the larger opportunity (and challenge) is for these teams to be able to convert their data into organizational intelligence that supports smarter decisions and generates greater value. Many AP teams possess a goldmine of information, including data held across thousands (or tens of thousands) of invoices and supplier payments. This data can be transformed into Key Performance Indicators (KPIs) that provide valuable insights to internal stakeholders, external partners/suppliers, and key business executives like the Chief Financial Officer (CFO). The KPIs can be used as a guide to help make better decisions and measure the performance of AP staffers, teams, and the overall AP operation.
Organizations that take a data driven approach to AP put themselves in a better position to improve efficiencies, more proactively manage their cash flow, and accelerate P2P performance. Below are a few of the KPIs that AP and finance leaders should focus on.
- Operational Metrics are essential for any organization to get an understanding of its current state. Understanding the metrics around the entire AP process will give the department a clear view into its overall performance and that of individual performers.
- Financial Metrics should be utilized to understand the importance AP has in the financial well-being of the enterprise as a whole. There is a financial benefit to being highly efficient, and impacting cash management has long been a strategy for AP units that want to become more strategically engaged within the enterprise.
- Supplier Metrics can be used to track supplier performance and general activity. By leveraging key supplier metrics, AP leaders can reduce the number of exceptions, help procurement identify problem suppliers, and develop more proactive payment strategies.
The modern AP function is in a better place today than it has ever been to deliver a higher level of value for the enterprise. All AP departments possess a wealth of data that can be used to improve operational and financial performance. When it comes to performance improvement, AP organizations should leverage their data to identify, track, and measure the metrics that will allow them to clearly understand their baseline or current state performance while laying the foundation to improve upon it in the future. To ultimately improve performance and make an impact, Finance and AP leaders (and their teams) must start measuring the right metrics and then focus on improving the underlying drivers of those results.
To read more about the specific KPIs that help place AP in a better position to make an impact, as well as key strategies to becoming a successful AP function, download the report here (registration required).
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