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    • The Significance of Three-Way Purchase Orders: Enhancing Efficiency and Accuracy with AP Automation
    • Revolutionizing Efficiency: The Comprehensive Benefits of Implementing Accounts Payable Automation in Organizations
    • The Power of Efficiency: Calculating Time and Cost Savings in the Accounts Payable Process with AP Automation
    • Vision360 Enterprise: Transforming Controllers' Roles and Why They Love It
    • Why BlueCreek Software: A Game Changer for Efficiency with Vision360 Enterprise
    • Revolutionizing Accounts Payable: The Power and Potential Concerns of AI Invoice Processing
    • Navigating Reluctance: Understanding Why Companies Hesitate to Implement Invoice Process Improvements
    • How AP Automation Transforms Finance at Every Level
    • Getting Started: Steps to Streamline and Optimize the Entire AP Process
    • Unlocking Efficiency and Savings: The Benefits of Invoice Optimization
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Benchmarking in Finance is More Critical Than Ever. 

4/1/2015

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With all Finance has to get done in a given day sometimes it’s hard to find the time to step back and track how efficient and effectively your department is running. Finance deals in numbers all day. But how often are you generating numbers to find out how efficient your finance team is?

But benchmarking is more critical than ever. By monitoring your functions’ performance you can determine where you can streamline, boost efficiency (and possibly cash flow) and incentivize staffers to do an even better job.

So what are the best metrics out there? Here are a few to get you started. How many of them are you currently using … and how many more could you be?

Accounts Payable
  • Cost per invoice (Total department spend [including allocated overhead] divided by the number of invoices processed)
  • Time to process invoices (Average time from when an invoice is received to when it’s ready for payment). Note: Don’t factor in actual payment time, since you probably do some strategic payment timing.
  • Percent of invoices paid within terms
  • Early pay discounts (percentage of invoices you can pay without paying the total invoice amount)
  • Percent of duplicate or erroneous payments
  • Days payable outstanding (accounts payable divided by cost of sales) * Days)

Accounts Receivable
  • Days sales outstanding (Total Accounts Receivables/Total Credit Sales) x Number of Days in the period that is being analyzed)
  • Best possible DSO (Best Possible DSO = Current Receivables/Total Credit Sales X Number of Days)
  • Collections Effectiveness Index
    Beginning receivables + Monthly credit sales – Ending total receivables  x 100
    Beginning receivables + Monthly credit sales – Ending current receivables
  • Average days delinquent (average number of days invoices go past due)

Payroll
  • Cost per payroll payment
  • Error rates
  • Number of manual checks cut
  • Days to process new hires
  • Cost per payroll inquiry
  • Days to resolve payroll inquiries (Note: You could also use this in A/P with days to resolve vendor inquiries and in A/R for customer questions.)

Whether you’re currently using a handful or the whole lot of these metrics, one thing’s a must: Let your staffers know what you’re using to track the department as well as their individual progress.

The last thing you want is for people to think you’re trying to “catch them” doing something wrong in their jobs. Better to position metrics as a way to raise the bar and a springboard to figure out what needs to most attention.

Please share any additional metrics you are using today!

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    Vision360 Enterprise  Accounts Payable Automation Solution by BlueCreek Software reduces time wasted chasing down paper invoices by automating invoice approvals, eliminating manual data entry, eliminating paper invoices and reducing processing costs.

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  • HOME
  • SERVICES
    • ACCOUNTS PAYABLE AUTOMATION
    • BUSINESS PROCESS AUTOMATION
    • DATA TRANSFORMATION
    • SPEND MANAGEMENT
    • SUPPLIER PAYMENTS
  • ACCOUNTING SYSTEMS
    • AS400
    • EPICOR
    • EPIC EHR/EMR
    • INFOR
    • JD EDWARDS
    • LAWSON
    • MEDITECH INTEGRATION
    • MS DYNAMICS 365
    • MS DYNAMICS GP AP AUTOMATION
    • MS DYNAMICS NAV INTEGRATION
    • MS DYNAMICS INTEGRATION
    • NETSUITE AP AUTOMATION
    • ORACLE INTEGRATION
    • PEOPLESOFT INTEGRATION
    • QAD INTEGRATION
    • QUICKBOOKS INTEGRATION
    • SAGE INTEGRATION
    • SAP INTEGRATION
  • INDUSTRIES
    • AGRICULTURE
    • CONSTRUCTION
    • FOOD & BEVERAGE
    • HEALTHCARE
    • HIGHER EDUCATION
    • HOSPITALITY
    • LIFE SCIENCES
    • MANUFACTURING
    • RETAIL
    • TECHNOLOGY
    • TRANSPORTATION
  • RESOURCES
    • Evolution of Invoice Processing: Tracing the Shift to Automation
    • The Costly Pitfalls of Manual Invoice Processing
    • Maximizing Cost Savings: How CFOs Can Leverage Invoice Process Improvements
    • A Day in the Life of an Payables Department: Unveiling the Essentials
    • The Significance of Three-Way Purchase Orders: Enhancing Efficiency and Accuracy with AP Automation
    • Revolutionizing Efficiency: The Comprehensive Benefits of Implementing Accounts Payable Automation in Organizations
    • The Power of Efficiency: Calculating Time and Cost Savings in the Accounts Payable Process with AP Automation
    • Vision360 Enterprise: Transforming Controllers' Roles and Why They Love It
    • Why BlueCreek Software: A Game Changer for Efficiency with Vision360 Enterprise
    • Revolutionizing Accounts Payable: The Power and Potential Concerns of AI Invoice Processing
    • Navigating Reluctance: Understanding Why Companies Hesitate to Implement Invoice Process Improvements
    • How AP Automation Transforms Finance at Every Level
    • Getting Started: Steps to Streamline and Optimize the Entire AP Process
    • Unlocking Efficiency and Savings: The Benefits of Invoice Optimization
  • CONTACT
    • LETS TALK
    • TRUST & SECURITY
    • SUBMIT RFP
    • SUPPORT
    • ABOUT
    • CAREERS