Shared Services Metrics – Accounts Payable
“What gets measured gets done” is a mantra known to all Shared Services leaders. This implies that Key Performance Measures (“KPIs”) are actionable, balanced, and consistent with service level agreements, cascaded to individuals, and tied to their performance.
Within the Peeriosity Accounts Payable research area, members can perform custom research and benchmark their Accounts Payable performance measurements, as well as related programs and results. A recent poll of Peeriosity Accounts Payable research area member companies revealed that most companies rate their measurement programs in Accounts Payable as moderately effective:
A follow-up question revealed barriers to greater effectiveness of their measurement programs:
Some representative comments include:
“Our overall effectiveness is limited by multiple systems and inconsistency of data. We are working toward a single instance of SAP and will eventually move Master Data management to Shared Services, which will improve things considerably”.
“As a company, we have high-quality easily accessible data and we think long and hard on what we measure. It can be very easy to wind up with too many measures that communicate mixed messages and priorities”.
“Identifying and aligning the critical few measures with our mission, the entire P2P process, and service levels is no easy trick. We prefer an approach of four or five balanced objectives and no more than one or two measures per objective. However, they all need to be actionable and linked to a continuous improvement program.”
On a recent Peeriosity PeercastTM the topic of Accounts Payable Performance Management was discussed in depth. Our feature company shared some of their “lessons learned” which included:
- Metrics should be aligned with mission and vision.
- Measures must be actionable.
- It is possible to have too many measures.
- Include metrics in performance management goals with clear, measurable expectations for improvement.
- Individuals and teams must have documented action plans on how they will improve the performance metrics and what the benefits will be once realized – the “who, what, why, how, and by when” are all known up front and expectations are clear.
- Metrics are tied to a continuous improvement program with a formalized methodology and language known by all those impacted. For example, root cause analysis is second nature for every excursion or defect.
- Reporting of metrics is done at the appropriate level and line of sight.
Peeriosity Accounts Payable research area members can also access over 100 member-prepared documents related to the Accounts Payable and P2P process all searchable by topic. Included in these documents is a Balanced Scorecard for P2P process from a member company. This scorecard links the P2P process objectives with the company mission and identifies metrics for the Shared Services Accounts Payable team as follows:
The conversation continues within the Peeriosity Accounts Payable research area where approximately 1,000 accounts payable and P2P practitioner peers are taking part in the conversation.
What are you measuring in Accounts Payable and how effective are those metrics?
Who are your peers and how are you collaborating with them?
1 “PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.