A cost per invoice benchmark is important because it tells you how efficient you are. Industry leaders are paying just a few dollars, but laggards are paying $10, $20, or more. It’s expensive, inefficient, and with the right elbow grease, can become a strength for the company instead of a weakness. Calculating your Cost per Invoice (CPI) benchmark may seem like a challenging and time-consuming task, but as we’ll discuss, an accurate CPI is well worth spending the time on to use as a tool to benchmark your AP department’s efficiency and help determine if you should look for ways to automate and improve your processes. Often AP departments will simply calculate their CPI by dividing the total annual salary of their AP department by the number of invoices processed per year, but this leaves out several important factors that impact cost and does not give a clear picture of where you can start improving your processes.
While many companies have digitized and streamlined their human resources and procurement workflow processes, significantly fewer companies have optimized their accounts payable (AP) process through efficient, cost-effective automated invoice processing and AP systems. Below are the latest recommendations for businesses looking to implement automated invoice processing or other AP automation systems. Measure and continually improve your AP performance using key performance indicators (KPIs). How can you know where you’re going if you don’t know where you’ve been? As AP processes continually become more strategic, it is helpful to determine solid metrics about your current performance, and then use those analytics
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