{"id":2189,"date":"2015-05-26T15:39:25","date_gmt":"2015-05-26T15:39:25","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=2189"},"modified":"2022-08-09T08:29:24","modified_gmt":"2022-08-09T08:29:24","slug":"the-what-and-why-of-accounts-payable-performance-measurement","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2015\/05\/the-what-and-why-of-accounts-payable-performance-measurement\/","title":{"rendered":"The What and Why of Accounts Payable Performance Measurement"},"content":{"rendered":"

When designing a performance measurement system for Accounts Payable, it is important to understand the reasons to measure and the outcomes desired as a result of completing the measurement process.\u00a0 While it\u2019s true that change begins with measurement, it is equally true that understanding the \u201cwhat and why\u201d for measurement<\/a> is an important first step to collecting the right information to guide your change initiatives.<\/span><\/p>\n

A recent PeercastTM<\/sup> in Peeriosity\u2019s Accounts Payable (P2P) research area<\/a> featured a $6B manufacturing and chemicals company with sales spread across more than 100 countries. They shared their journey to create a global payables solution and the importance of selecting the right measures for the right reasons.\u00a0 Starting with a list of 30 common Accounts Payable measures, they eliminated half of them, to focus on the ones that best met the needs of their internal customers<\/a> and key stakeholders, including the following:<\/span><\/p>\n

    \n
  1. Individuals, work teams, and management within Accounts Payable \u2013 with measures that target workload balancing, productivity, and improvement opportunities.<\/span><\/li>\n
  2. Procurement leadership \u2013 with measures that target vendor performance and management<\/a>, discounts performance, invoice processing, and invoice aging.<\/span><\/li>\n
  3. Financial leadership \u2013 working capital, DPO, discounts are taken, and cost per invoice.<\/span><\/li>\n<\/ol>\n

    Selected measures needed to be meaningful and relevant, highlighting both good and poor performance, with a collection process that was simple and straightforward to administer.<\/span><\/p>\n

    Examples of the analysis for measures that were eliminated:<\/span><\/p>\n

    \"\"<\/a>A supporting iPollingTM <\/sup>question examined the scope of the Accounts Payable performance measurement program at the companies participating in the research.\u00a0 The results show that 50% of companies include cost, productivity, and quality measures, and 31% also includes measures of customer satisfaction.\u00a0 An additional 13% focus on cost and productivity only, and 6% include only productivity and quality measures.\u00a0 All companies who responded have a performance measurement program in place.\u00a0 Here are the details:<\/span><\/p>\n

    \"apect<\/p>\n

    The second iPollingTM<\/sup> question asked about the effectiveness of the performance measurement program for Accounts Payable.\u00a0 Interestingly, 13% of the companies indicated that their programs were highly effective, and the same percentage, 13%, responded that their programs had limited effectiveness.\u00a0 The overwhelming majority of companies (74%) indicated that their programs, while effective, could be better.<\/span><\/p>\n

    \"effectivity<\/p>\n

    An insight shared by many of the participants on the Peercast is that carefully considering the audience and reasons for each measure can positively impact the overall effectiveness of the performance measurement program.\u00a0 Then, using a collaborative approach to discussing measures with each customer group, improvements to the program can be implemented that meet the needs of all parties.<\/span><\/p>\n

    What aspects of Accounts Payable performance do you measure at your company?\u00a0 How effective is your company\u2019s current performance measurement program?<\/span><\/p>\n

    Who are your<\/em> peers and how are you collaborating with them?<\/span><\/p>\n

    \n

    _________________________________________________________________<\/p>\n<\/div>\n

    \u201cPeercastsTM<\/sup>\u201d are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion.\u00a0 Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content.\u00a0 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.\u00a0 Using Peeriosity\u2019s integrated email system, Peer MailTM<\/sup>, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.\u00a0<\/span><\/p>\n

    \u00a0<\/sup>\u201ciPollingTM<\/sup>\u201d is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility of all respondents and their comments. Using Peeriosity\u2019s integrated email system, Peer MailTM<\/sup>, members can easily communicate at any time with others who participated in iPolling.<\/span><\/p>\n

    \n

    Peeriosity members are invited to log into www.peeriosity.com<\/a> to join the discussion and connect with Peers.\u00a0\u00a0 Membership is for practitioners only, with no consultants or vendors permitted.\u00a0 To learn more about Peeriosity, click here<\/a>.<\/span><\/p>\n<\/div>\n

    <\/span><\/span><\/span><\/p>","protected":false},"excerpt":{"rendered":"

    When designing a performance measurement system for Accounts Payable, it is important to understand the reasons to measure and the outcomes desired as a result of completing the measurement process.\u00a0 While it\u2019s true that change begins with measurement, it is equally true that understanding the \u201cwhat and why\u201d for measurement is an important first step […]<\/p>\n

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