Originally published on InContext, a Lexmark website.
Imagine driving change that moves your business forward, without disrupting critical everyday financial operations. It’s possible and necessary as part of the changing landscape of business. The traditional CFO role is evolving from cost control and accounting, to a focus on financial transformation and digitization. In an effort to get more out of spreadsheet data and make finance an analytic dynamo for the organization, CFOs are tracking performance (particularly in accounts payable) and addressing process efficiency from a holistic view.
The right measures
AP’s performance is under constant scrutiny. But are CFOs using the right metrics? According to a recent Ardent Partners report, AP departments are most often measured on the volume of their activity and payment metrics. In fact, 75% use metrics like number of invoices processed or number of payments made, and 63% put more weight on payment metrics focused on accuracy. While these measurements offer a good idea of the department’s efficiency, they fall short on gauging the true value (or potential value) of AP to the organization.
According to Ardent Partners, only 36% of enterprises evaluate AP around financial metrics such as rebates and early payment discounts, and even fewer (31%) evaluate the department on process, regulatory or financial compliance. Opening up the evaluation of AP to more than just the traditional tactical metrics offers opportunity for greater insight into AP’s impact across the organization.
Break silos to outperform
Top performing companies are unlocking the value of AP data and extending those insights across the purchase-to-pay process chain to procurement. In fact, these organizations are 77% more likely to leverage a complete automated procure-to-pay solution, according to Ardent Partners.
Through automated solutions, these performance champions are breaking down the barriers between purchasing and AP, making everyday operations more efficient, and turning financial data into actionable insights to outperform their peers.
Ardent Partners found that compared with their peers, best-in-class enterprises are 89% more likely to view AP as exceptionally or very valuable form a strategic perspective. They are also more likely to leverage intelligence from AP in the following areas:
- 1.2-times more likely for forecasting, budgeting and planning
- 2.3-times more likely to understand the impact of cash
- 2.7-times more likely to develop better payment strategies
Are you tracking similar success metrics across your P2P cycle? Start today – Read our white paper for more secrets of performance champions.