{"id":29191,"date":"2026-03-18T11:49:53","date_gmt":"2026-03-18T11:49:53","guid":{"rendered":"https:\/\/www.sage.com\/en-gb\/blog\/?p=29191"},"modified":"2026-03-18T11:51:48","modified_gmt":"2026-03-18T11:51:48","slug":"accounts-payable-kpis","status":"publish","type":"post","link":"https:\/\/www.sage.com\/en-gb\/blog\/accounts-payable-kpis\/","title":{"rendered":"Accounts payable KPIs: Essential AP metrics to track and\u00a0optimise\u00a0performance\u00a0"},"content":{"rendered":"<header class=\"entry-header has-dark-background-color entry-header--standard entry-header--has-illustration entry-header--has-illustration--standard\">\n\t<div class=\"container\">\n\t\t<div class=\"entry-header__row row align-center\">\n\t\t\t<div class=\"col col-lg-7 col-xlg-6 entry-header__content\">\n\t\t\t\t\t\t\t<div class=\"component component-single-header\">\n\t\t\t\t\t\t\t\t\t\t<div class=\"entry-header__misc text--subtitle text--uppercase text--small\">\n\t\t\t\t\t\t\t<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/category\/money-matters\/\" class=\"entry-header__link\">Money Matters<\/a>\t\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t<div class=\"entry-title-wrapper\">\n\t\t\t\t\t<h1 class=\"entry-title\">\n\t\t\t\t\t\tAccounts payable KPIs: Essential AP metrics to track and\u00a0optimise\u00a0performance\u00a0\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t<p class=\"entry-header__description\">\n\t\t\t\t\t\tStrong supplier relationships and healthy cash flow depend, in part, on a well-managed accounts payable ledger. Appropriate KPIs offer visibility into the metrics that drive your AP process. Let&#8217;s explore some key examples. \t\t\t\t\t<\/p>\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t<div class=\"single-post-details container\">\n\t\t<div class=\"col\">\n\t\t\t<span class=\"posted-on \"><time class=\"entry-date published\" datetime=\"2026-03-18T11:49:53+00:00\">18 March, 2026<\/time><\/span><span class=\"reading-time\"> min read<\/span>\n\t\t<button\n\t\t\ttype=\"button\"\n\t\t\tclass=\"social-share-button button button--icon button--secondary js-social-share-button\"\n\t\t\tdata-share-title=\"Accounts payable KPIs: Essential AP metrics to track and\u00a0optimise\u00a0performance\u00a0\"\n\t\t\tdata-share-url=\"https:\/\/www.sage.com\/en-gb\/blog\/accounts-payable-kpis\/\"\n\t\t\tdata-share-text=\"Please read this interesting article\"\n\t\t>\n\t\t\t<span class=\"social-share-button__share-label\">Share<\/span>\n\t\t\t<span class=\"social-share-button__copy-label\" hidden>Copy Link<\/span>\n\t\t\t<span class=\"social-share-button__copy-tooltip\" aria-hidden=\"true\" hidden>Copied<\/span>\n\t\t<\/button>\n\n\t\t\t\t<\/div>\n\t<\/div>\n<\/header>\n\n\n\n<div class=\"wp-block-post-author\">\n\t\t\t<div class=\"co-authors\">\n\t\t\t\n\t\t<div class=\"entry-author-wrapper\">\n\t\t\t<a class=\"entry-author\" href=\"https:\/\/www.sage.com\/en-gb\/blog\/author\/laurencematone\/\">\n\t\t\t\t<img loading=\"lazy\" decoding=\"async\" width=\"40\" height=\"40\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2026\/03\/Profile_LM-350x350.jpeg\" class=\"entry-author__image\" alt=\"Laurence Matone\" \/>\t\t\t\t<span class=\"entry-author__name\">Laurence Matone<\/span>\n\t\t\t<\/a>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t<\/div>\n\t\t<\/div>\n\n\n\n<p>Are you still&nbsp;getting to&nbsp;grips with cash flow issues and&nbsp;late payments&nbsp;that cloud&nbsp;your&nbsp;Accounts Payable (AP) process?&nbsp;<\/p>\n\n\n\n<p>Without proper AP tracking, your business could face costly delays, increased errors, and lost opportunities to take advantage of&nbsp;early payment&nbsp;discounts.&nbsp;<\/p>\n\n\n\n<p>The solution?&nbsp;<\/p>\n\n\n\n<p>A proper understanding of AP Key Performance Indicators (KPIs) and how to track them.&nbsp;<\/p>\n\n\n\n<p>These metrics serve as a roadmap for streamlining your AP operations, improving financial health, and building strong supplier relationships.&nbsp;<\/p>\n\n\n\n<p>This article will guide you through the essential AP KPIs for improving this aspect of your business.&nbsp;<\/p>\n\n\n\n<p>From automating&nbsp;<strong>invoice processing<\/strong>&nbsp;to&nbsp;optimising&nbsp;payment schedules, we look at specific metrics that can make a difference in the way you manage your finances.&nbsp;<\/p>\n\n\n\n<p><strong>Here&#8217;s&nbsp;what&nbsp;we&#8217;ll&nbsp;cover:<\/strong>&nbsp;<\/p>\n\n\n<?xml encoding=\"utf-8\" ?><div class=\"wp-block-yoast-seo-table-of-contents yoast-table-of-contents\"><ul><li><a href=\"#h-what-are-accounts-nbsp-payable-nbsp-kpis-nbsp\" data-level=\"2\">What are accounts&nbsp;payable&nbsp;KPIs? &nbsp;<\/a><\/li><li><a href=\"#h-essential-accounts-payable-kpi-examples-nbsp\" data-level=\"2\">Essential accounts payable KPI examples &nbsp;<\/a><\/li><li><a href=\"#h-what-is-the-best-kpi-for-accounts-payable-nbsp\" data-level=\"2\">What is the best KPI for accounts payable? &nbsp;<\/a><\/li><li><a href=\"#h-how-to-build-an-nbsp-effective-accounts-nbsp-payable-kpi-dashboard-nbsp\" data-level=\"2\">How to build an&nbsp;effective accounts&nbsp;payable KPI dashboard &nbsp;<\/a><\/li><li><a href=\"#h-using-automation-to-manage-ap-kpis-nbsp\" data-level=\"2\">Using automation to manage AP KPIs &nbsp;<\/a><\/li><li><a href=\"#h-putting-accounts-payable-kpis-into-action-nbsp\" data-level=\"2\">Putting Accounts Payable KPIs into Action &nbsp;<\/a><\/li><\/ul><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-are-accounts-nbsp-payable-nbsp-kpis-nbsp\"><strong>What are accounts&nbsp;payable&nbsp;KPIs?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>Accounts payable or AP KPIs are the main metrics that measure the effectiveness and efficiency of your&nbsp;accounts&nbsp;payable processes.&nbsp;<\/p>\n\n\n\n<p>They provide a clear picture of how well your company is managing its financial obligations to suppliers.&nbsp;<\/p>\n\n\n\n<p>Why do they matter? Because they offer insights into your operational efficiency, cost control, and overall financial health.&nbsp;<\/p>\n\n\n\n<p>By tracking these KPIs, you can&nbsp;identify&nbsp;bottlenecks, reduce errors, and improve cash flow management.&nbsp;<\/p>\n\n\n\n<p>Those insights translate into:&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-streamlined-operations-nbsp\"><strong>Streamlined operations<\/strong>&nbsp;<\/h3>\n\n\n\n<p>KPIs measuring invoice processing efficiency help you pinpoint slowdowns and automate manual tasks, leading to faster, more efficient workflows.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-reduced-costs-nbsp\"><strong>Reduced costs<\/strong>&nbsp;<\/h3>\n\n\n\n<p>By tracking cost per invoice and&nbsp;early payment&nbsp;discounts you capture, you can further&nbsp;optimise&nbsp;processes and negotiate better supplier terms.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-enhanced-supplier-relationships-nbsp\"><strong>Enhanced supplier relationships<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Stats relating to&nbsp;<a href=\"https:\/\/www.sage.com\/en-gb\/blog\/days-payable-outstanding-defined\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Days Payable Outstanding (DPO)<\/strong><\/a><strong>&nbsp;<\/strong>and payment accuracy help you ensure&nbsp;timely&nbsp;payments, building trust with your suppliers.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-improved-financial-visibility-nbsp\"><strong>Improved financial visibility<\/strong>&nbsp;<\/h3>\n\n\n\n<p>These KPIs provide an up-to-date, data-driven view of your financial obligations, enabling better forecasting and strategic decision-making.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-essential-accounts-payable-kpi-examples-nbsp\"><strong>Essential accounts payable KPI examples<\/strong>&nbsp;<\/h2>\n\n\n\n<p>As implied above, there are multiple&nbsp;facets&nbsp;of accounts payable that can be measured to&nbsp;provide&nbsp;these insights.&nbsp;<\/p>\n\n\n\n<p>Let&#8217;s&nbsp;look at the AP KPIs that provide the most valuable information.&nbsp;<\/p>\n\n\n\n<p>There are four main groups of KPIs to consider\u2014those relating to the invoice processing rate, those describing the cost of processing, those affecting cash flow, and those tracking fraud and compliance.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-invoice-processing-efficiency-kpis-nbsp\"><strong>1. Invoice processing efficiency KPIs<\/strong>&nbsp;<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-a-invoices-processed-per-fte-nbsp\"><strong>A. Invoices processed per FTE<\/strong>&nbsp;<\/h4>\n\n\n\n<p>This KPI measures the number of invoices processed within a specific&nbsp;timeframe&nbsp;(usually a week) by one full-time employee.&nbsp;<\/p>\n\n\n\n<p>The hours worked by an average employee in that period are called the Full-Time Equivalent (FTE).&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;total invoices processed \/ number of FTEs.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>A common result here would be 50-100 invoices per FTE per week, depending on industry and automation levels.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;it gauges the productivity and efficiency of your AP team.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:<\/strong>&nbsp;implement automation, streamline workflows, and provide adequate training.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-b-invoice-cycle-time-nbsp\"><strong>B. Invoice cycle time<\/strong>&nbsp;<\/h4>\n\n\n\n<p>This is the average time taken to process an invoice from receipt to payment.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;for each invoice, note the number of days between receipt of the invoice and payment. Add those numbers for all invoices. Divide the total by the number of invoices to get the average. For a medium-sized company, a reasonable rate is 3-10 days.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;shorter cycle times&nbsp;indicate&nbsp;efficiency and can lead to better supplier relationships.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:&nbsp;<\/strong>automate data entry, reduce&nbsp;approval&nbsp;bottlenecks (e.g.&nbsp;by&nbsp;identifying&nbsp;and&nbsp;eliminating&nbsp;unnecessary approval steps), and use electronic invoice systems.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-c-time-nbsp-required-nbsp-to-approve-payments-nbsp\"><strong>C. Time&nbsp;required&nbsp;to approve payments<\/strong>&nbsp;<\/h4>\n\n\n\n<p>The average delay for approving a payment after the expenditure has been&nbsp;authorised&nbsp;(assuming one department approves the invoice as necessary and then&nbsp;submits&nbsp;a payment request to the finance team).&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:&nbsp;<\/strong>for each invoice, note the number of days between submission of the payment request and actual payment. Add those numbers for all invoices. Divide by the total number of payments made.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;long approval times can delay payments, strain supplier relationships, and impact cash flow.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:&nbsp;<\/strong>establish&nbsp;clear approval workflows, set approval limits based on employee roles, and implement digital approval systems with notifications.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-cost-management-and-accuracy-kpis-nbsp\"><strong>2. Cost management and accuracy KPIs<\/strong>&nbsp;<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-a-cost-per-invoice-processed-nbsp\"><strong>A. Cost per invoice processed<\/strong>&nbsp;<\/h4>\n\n\n\n<p>In other words, the average cost of processing a single invoice, combining items such as AP staff wages, software costs, postage, and storage.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;total AP processing costs \/ total invoices processed.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>For example, a standard monthly result in the UK would be between \u00a32 and \u00a312 per invoice.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;it highlights areas where cost-saving measures can be implemented.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:&nbsp;<\/strong>automate manual tasks, negotiate better supplier terms, and reduce paper usage.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-b-invoice-exception-rate-nbsp\"><strong>B. Invoice exception rate<\/strong>&nbsp;<\/h4>\n\n\n\n<p>This is the percentage of invoices that require manual intervention due to errors or discrepancies.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;(number of&nbsp;exception&nbsp;invoices \/ total invoices processed) x 100.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;a high exception rate, above 5% for example,&nbsp;indicates&nbsp;inefficiencies and&nbsp;potential for&nbsp;errors.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:<\/strong>&nbsp;implement automated matching,&nbsp;standardise&nbsp;invoice formats, and provide clear supplier guidelines.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-c-percentage-of-invoices-per-supplier-nbsp\"><strong>C. Percentage of invoices per supplier<\/strong>&nbsp;<\/h4>\n\n\n\n<p>The distribution of invoices received across your list of suppliers shows you whether&nbsp;you&#8217;re&nbsp;exposed to risk by being too dependent on just a few suppliers.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;(number of invoices from supplier X \/ total number of invoices) x 100.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;this KPI helps&nbsp;identify&nbsp;key suppliers, assess supplier concentration risks, and potentially negotiate better terms with high-volume suppliers. It also helps detect any anomalies that may&nbsp;indicate&nbsp;fraud.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:&nbsp;<\/strong>regularly&nbsp;analyse&nbsp;supplier spend,&nbsp;consolidate&nbsp;suppliers where possible, and&nbsp;maintain&nbsp;strong relationships with critical suppliers.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-payment-and-cash-flow-management-kpis-nbsp\"><strong>3. Payment and cash flow management KPIs<\/strong>&nbsp;<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-a-days-payable-outstanding-dpo-nbsp\"><strong>A. Days Payable Outstanding (DPO)<\/strong>&nbsp;<\/h4>\n\n\n\n<p>This is the average number of days a company typically takes to pay its suppliers, based on the average cost of running its business.&nbsp;It&#8217;s&nbsp;basically your&nbsp;track record&nbsp;of keeping up with payments due.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;(average balance of accounts payable \/ cost of goods sold) x period under analysis (number of days).&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;it reflects the company&#8217;s ability to manage cash flow and supplier relationships.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:<\/strong>&nbsp;negotiate&nbsp;favourable&nbsp;payment terms,&nbsp;optimise&nbsp;payment schedules, and&nbsp;monitor&nbsp;cash flow projections.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-b-nbsp-early-payment-nbsp-discounts-captured-nbsp\"><strong>B.&nbsp;Early payment&nbsp;discounts captured<\/strong>&nbsp;<\/h4>\n\n\n\n<p>If your suppliers offer discounts for early payments, then the proportion of payments that qualify shows how well-organised&nbsp;you are.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;(number of discounts approved \/ number of discounts offered) x 100.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;it shows how effectively the company is&nbsp;maximising&nbsp;cost savings.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:<\/strong>&nbsp;implement a system to track and&nbsp;prioritise&nbsp;discounts and ensure&nbsp;timely&nbsp;payments.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-c-nbsp-late-payment-nbsp-rate-nbsp\"><strong>C.&nbsp;Late payment&nbsp;rate<\/strong>&nbsp;<\/h4>\n\n\n\n<p>An obvious indicator of inefficiency is the percentage of payments you make after the agreed-upon due date, highlighting potential issues with your payment processes. A common benchmark is to keep this figure below 10%.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:&nbsp;<\/strong>(number of&nbsp;late payments&nbsp;\/ total number of payments) x 100.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:<\/strong>&nbsp;a high rate of&nbsp;late payments&nbsp;can damage supplier relationships, incur late fees, and&nbsp;indicate&nbsp;cash flow problems.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:<\/strong>&nbsp;implement&nbsp;timely&nbsp;payment schedules, automate payment reminders, and improve communication with suppliers about payment terms.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-d-percentage-of-payments-made-automatically-nbsp\"><strong>D. Percentage of payments made automatically<\/strong>&nbsp;<\/h4>\n\n\n\n<p>A measure of efficiency and digital maturity would be the proportion of payments processed electronically, typically via Bankers&#8217; Automated Clearing System (Bacs) or similar methods, compared to total payments.&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formula:<\/strong>&nbsp;(number of automated payments \/ total number of payments) x 100.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Why&nbsp;it&#8217;s&nbsp;important:&nbsp;<\/strong>higher automation reduces manual effort, errors, cost, and processing time, improving efficiency and cash flow management.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Best practices to improve it:&nbsp;<\/strong>encourage suppliers and partners to accept electronic payments, integrate with payment automation platforms, and configure approval workflows for electronic transactions.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-fraud-prevention-and-compliance-kpis-nbsp\"><strong>4. Fraud prevention and compliance KPIs<\/strong>&nbsp;<\/h3>\n\n\n\n<p>These KPIs are often more qualitative and therefore take more of a checklist format.&nbsp;<\/p>\n\n\n\n<p>They&nbsp;monitor&nbsp;issues such as anomalies, segregation of duties, and the frequency of compliance audits.&nbsp;<\/p>\n\n\n\n<p>Obviously, their importance relates to security, risk, and adherence to regulations.&nbsp;<\/p>\n\n\n\n<p>Whilst they&nbsp;don&#8217;t&nbsp;require&nbsp;a formula, they can yield numerical statistics like the number of fraud attempts detected, fraud detection rate (number of frauds \/ total transactions), or compliance audit results.&nbsp;<\/p>\n\n\n\n<p>Best practices for improving <a href=\"https:\/\/www.sage.com\/en-gb\/blog\/accounts-payable-fraud-guide\/\">fraud prevention<\/a> and compliance monitoring include regularly reviewing and updating internal controls, refining\u00a0authorisation\u00a0workflows, and conducting periodic staff training on fraud detection and compliance procedures.\u00a0<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-the-best-kpi-for-accounts-payable-nbsp\"><strong>What is the best KPI for accounts payable?<\/strong>&nbsp;<\/h2>\n\n\n\n<p>There&#8217;s&nbsp;no single &#8220;best&#8221;&nbsp;KPI for&nbsp;accounts payable; it depends on your business goals.&nbsp;<\/p>\n\n\n\n<p>If&nbsp;you&#8217;re&nbsp;cost-focused, then&nbsp;prioritise&nbsp;cost per invoice processed and&nbsp;early payment&nbsp;discounts captured.&nbsp;<\/p>\n\n\n\n<p>If efficiency is your goal, focus on invoice processing efficiency and invoice cycle time.&nbsp;<\/p>\n\n\n\n<p>For cash flow management, DPO is an excellent metric to keep an eye on.&nbsp;<\/p>\n\n\n\n<p>Either way,&nbsp;it&#8217;s&nbsp;always good practice to align KPIs with your strategic&nbsp;objectives.&nbsp;<\/p>\n\n\n\n<p>However, take note that KPIs can become less measurable or actionable over time.&nbsp;<\/p>\n\n\n\n<p>Regularly review them to confirm their ongoing relevance, and if necessary, adapt them to your evolving business needs.&nbsp;<\/p>\n\n\n\n<p>Your KPIs can become less effective because of changes in business processes, such as:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>switching to a new accounting system,&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>new technologies&nbsp;that can add to the number of tasks you have automated,&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>new strategic goals,&nbsp;e.g.&nbsp;changing focus to rapid growth and efficiency rather than cost,&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>or&nbsp;external factors such as economic downturns or sudden changes in your supply chain dynamics.&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-how-to-build-an-nbsp-effective-accounts-nbsp-payable-kpi-dashboard-nbsp\"><strong>How to build an&nbsp;effective accounts&nbsp;payable KPI dashboard<\/strong>&nbsp;<\/h2>\n\n\n\n<p>An AP KPI dashboard is the ideal tool for highlighting the most relevant metrics, expressing them clearly, and ensuring that they are easily shared with all stakeholders.&nbsp;<\/p>\n\n\n\n<p>It should provide a real-time snapshot of your AP performance and is your first&nbsp;option&nbsp;for orientation to make decisions quickly.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-is-an-ap-nbsp-metrics-nbsp-dashboard-nbsp\"><strong>What is an AP&nbsp;metrics&nbsp;dashboard?<\/strong>&nbsp;<\/h3>\n\n\n\n<p>A dashboard is a&nbsp;visualisation&nbsp;tool that displays key performance indicators, in this case, accounts payable performance metrics.&nbsp;<\/p>\n\n\n\n<p>It&nbsp;provides&nbsp;a&nbsp;centralised&nbsp;view of critical data, allowing you to&nbsp;monitor&nbsp;operations,&nbsp;identify&nbsp;trends, and take corrective action if results are suboptimal.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-key-elements-of-a-high-performing-dashboard-nbsp\"><strong>Key elements of a high-performing dashboard<\/strong>&nbsp;<\/h3>\n\n\n\n<p>For best results, your accounts payable metrics dashboard should include:&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-customisable-nbsp-views-nbsp\"><strong>Customisable&nbsp;views<\/strong>&nbsp;<\/h4>\n\n\n\n<p>Based on company priorities, allowing&nbsp;users to focus on the&nbsp;metrics most relevant&nbsp;to their roles.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-real-time-tracking-nbsp\"><strong>Real-time tracking<\/strong>&nbsp;<\/h4>\n\n\n\n<p>Real-time tracking of invoices, payments, and processing times.&nbsp;<\/p>\n\n\n\n<p>This is the raw data you use to&nbsp;ascertain&nbsp;the KPIs listed above.&nbsp;<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-integration-nbsp\"><strong>Integration<\/strong>&nbsp;<\/h4>\n\n\n\n<p>Integration with&nbsp;<a href=\"https:\/\/www.sage.com\/en-gb\/accounting-software\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>accounting software<\/strong><\/a>&nbsp;for automated data updates.&nbsp;<\/p>\n\n\n\n<p>This ensures your data is&nbsp;accurate&nbsp;and frees staff to focus on more analytical tasks.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-using-automation-to-manage-ap-kpis-nbsp\"><strong>Using automation to manage AP KPIs<\/strong>&nbsp;<\/h2>\n\n\n\n<p>In our section on KPI examples,&nbsp;you&#8217;ve&nbsp;learnt&nbsp;how automation can improve the clarity of your results.&nbsp;<\/p>\n\n\n\n<p>Here&#8217;s how modern systems can further streamline the KPI tracking process through a series of features that take the manual data-entry pain away.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-speeding-up-invoice-processing-nbsp\"><strong>Speeding up invoice processing<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Automated AP processing solutions like&nbsp;<a href=\"https:\/\/www.sage.com\/en-gb\/sage-business-cloud\/intacct\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>Sage Intacct<\/strong><\/a>, for example, leverage AI-powered data extraction and duplicate flagging features.&nbsp;<\/p>\n\n\n\n<p>This gives you instant and&nbsp;accurate&nbsp;data capture from invoices, removing manual&nbsp;admin&nbsp;and reducing data entry errors or discrepancies.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-efficient-approvals-nbsp\"><strong>Efficient approvals<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Automated systems automatically route invoices to the right people for approval, reducing delays and preventing&nbsp;unauthorised&nbsp;purchases.&nbsp;<\/p>\n\n\n\n<p>Added security features like role-based access control ensure only&nbsp;authorised&nbsp;personnel can approve transactions, protecting sensitive financial data.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-integration-with-erp-systems-nbsp\"><strong>Integration with ERP systems<\/strong>&nbsp;<\/h3>\n\n\n\n<p>Modern automated AP solutions also allow you to integrate your AP workflow with your ERP systems, enhancing visibility with&nbsp;a single source&nbsp;of truth and boosting operational efficiency.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-data-security-nbsp\"><strong>Data security<\/strong>&nbsp;<\/h3>\n\n\n\n<p>The software embeds proven security protocols to protect your data against breaches and fraud.&nbsp;<\/p>\n\n\n\n<p>Features like automated logging and audit trails give you a detailed record of data access and modifications, ensuring transparency and regulatory compliance.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-putting-accounts-payable-kpis-into-action-nbsp\"><strong>Putting Accounts Payable KPIs into Action<\/strong>&nbsp;<\/h2>\n\n\n\n<p>Companies that meticulously track and&nbsp;optimise&nbsp;their AP metrics with&nbsp;<a href=\"https:\/\/www.sage.com\/en-gb\/accounting-software\/accounts-payable\/\" target=\"_blank\" rel=\"noreferrer noopener\"><strong>accounts payable software<\/strong><\/a>&nbsp;can gain a competitive advantage.&nbsp;<\/p>\n\n\n\n<p>Close attention to these KPIs can help you focus on efficiency, cost reduction, and building strong supplier relationships.&nbsp;<\/p>\n\n\n\n<p>To effectively gather the data needed for accounts payable KPIs, consider the following actionable steps:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Automation to reduce reliance on manual processes,&nbsp;minimise&nbsp;errors, and streamline workflows&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Standardise&nbsp;your AP policies and procedures to ensure consistency&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Optimise&nbsp;payment schedules to capture&nbsp;early payment&nbsp;discounts.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p>Furthermore, adopting a comprehensive KPI dashboard positions you for conducting regular audits of your AP performance.&nbsp;<\/p>\n\n\n\n<p>This is a solid basis for continuous improvement of your AP processes, helping you&nbsp;maintain&nbsp;healthy cash flow and bolster your bottom line.&nbsp;<\/p>\n\n\n<div class=\"single-cta\">\n\t<div class=\"single-cta__positioner\">\n\t\t<div class=\"single-cta__wrapper has-dark-background-color\">\n\t\t\t<div class=\"single-cta__content\">\n\t\t\t\t\t\t\t\t<h2 class=\"single-cta__title h3\">Subscribe to the Sage Advice newsletter<\/h2>\n\n\t\t\t\t\t\t\t\t\t<div class=\"single-cta__description\">\n\t\t\t\t\t\t<p>Join more than 500,000 UK readers and get the best business admin strategies and tactics, as well as actionable advice to help your company thrive, in your inbox every month.<\/p>\n\t\t\t\t\t<\/div>\n\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a\n\t\t\t\t\t\thref=\"#gate-b1a63862-3fa0-4a5e-bb67-c76b88bbc6b8\"\n\t\t\t\t\t\tclass=\"single-cta__button button button--primary\"\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t>Subscribe now<\/a>\n\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\n\t\t\t\t\t<img decoding=\"async\" width=\"1440\" height=\"810\" src=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1073797282-1-1440x810.jpg\" class=\"single-cta__image\" alt=\"\" loading=\"lazy\" srcset=\"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1073797282-1-1440x810.jpg 1440w\" sizes=\"auto, (min-width: 48em) 33vw, 100vw\" \/>\t\t\t<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Strong supplier relationships and healthy cash flow depend, in part, on a well-managed accounts payable ledger. Appropriate KPIs offer visibility into the metrics that drive your AP process. Let&#8217;s explore some key examples. <\/p>\n","protected":false},"author":1911,"featured_media":11452,"menu_order":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sage_video":false,"post_featured_image_hide":false,"footnotes":""},"categories":[6],"tags":[24,164,311],"business_type":[4,3],"lilypad":[],"context":[],"industry":[],"persona":[71,73,74],"imagine_tag":[312],"coauthors":[752],"class_list":["post-29191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-money-matters","tag-cash-flow","tag-finance","tag-payments","business_type-small-business","business_type-medium-sized-business"],"sage_meta":{"region":"en-gb","author_name":"Laurence Matone","featured_image":"https:\/\/www.sage.com\/en-gb\/blog\/wp-content\/uploads\/sites\/10\/2022\/04\/GettyImages-1271694534.jpg","imagine_tags":{"312":"Payments"}},"distributor_meta":false,"distributor_terms":false,"distributor_media":false,"distributor_original_site_name":"Sage Advice UK","distributor_original_site_url":"https:\/\/www.sage.com\/en-gb\/blog","push-errors":false,"_links":{"self":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/29191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/users\/1911"}],"replies":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/comments?post=29191"}],"version-history":[{"count":5,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/29191\/revisions"}],"predecessor-version":[{"id":29196,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/posts\/29191\/revisions\/29196"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media\/11452"}],"wp:attachment":[{"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/media?parent=29191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/categories?post=29191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/tags?post=29191"},{"taxonomy":"business_type","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/business_type?post=29191"},{"taxonomy":"lilypad","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/lilypad?post=29191"},{"taxonomy":"context","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/context?post=29191"},{"taxonomy":"industry","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/industry?post=29191"},{"taxonomy":"persona","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/persona?post=29191"},{"taxonomy":"imagine_tag","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/imagine_tag?post=29191"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.sage.com\/en-gb\/blog\/api\/wp\/v2\/coauthors?post=29191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}