When it comes to understanding and evaluating the performance of the accounts payable area various metrics are normally used, but perhaps the most common and widespread is the number of invoices registered per employee in a period of time, normally a year.
Productivity of Accounts Payable
It is a significant value to indicate the work load and which allows an easy internal comparison within the department and with other companies. However, it is also excessively simplistic. Everyone who works in AP knows that you do not need the same time to register an invoice with purchase order , as an invoice without. Nor is it the same to approve an invoice without lines of detail as one which has lines of detail.
It would be convenient to understand the type of task undertaken. This measure is much more precise and significant, as well as serving as a source of identifying points to improve. Speaking tasks common in the area, the following should be considered:
Productivity in Accounts Payable: According to developed task
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Document Management
- Everything referring to document receipt and preparation for its later processing. Invoice unpacking distribution to approval officers and archiving....
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Invoice Validation
- Understood as comparing invoices to other elements, and it can be two or three ways depending on whether the order (purchase order) and/or delivery note (reception of goods or services) are included. The result will be an accounting note or identification of differences.
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Incident Resolution
- Making reference to all the tasks orientated to resolving an identified problem in an invoice. It could be a problem of form in the document (error in VAT calculation, duplicate invoice...) or a problem of content (amount different from the order, different number of units from delivery, provider doesn't exist...)
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Encoding
- To name direct accounting entries in general ledger accounts and analytical accounting items. This is a necessary task when recording invoices without orders and sometimes a way to resolve issues with invoices with orders.
As the times needed to code an invoice are not the same as to validate or resolve an incident, it would be useful to be able to be able to measure and understand the resources dedicated to each one of these tasks. Understanding them will help us identify unknown realities and aspect to improve.
