In today’s uncertain economic environment, organizations are putting extra emphasis on spend management – monitoring and maximizing company spend. The accounts payable (AP) department plays a critical role in this expenditure cycle, with success tightly linked to the efficiency and accuracy of the team and their processes.
The payables process generally involves several steps:
It’s important for businesses to know how long it takes an invoice to go from indexing to approval, as it helps them identify bottlenecks in their AP process. However, determining this information without using technology can be challenging – and with an estimated 50% of invoices received still being paper-based, this challenge is exacerbated.
Technology to the Rescue
Businesses are turning to business intelligence (BI) solutions to help address this type of challenge. In our survey of middle market finance teams, 50% said they are using automation technology to analyze data and make more informed decisions.
By leveraging advanced analytics tools, accounting professionals can gain valuable insights into their invoice management process. Additionally, understanding invoice processing time offers other benefits, including:
Measuring invoice processing time is vital for understanding the efficiency of the accounting department’s operations and identifying areas for improvement. By analyzing this data, accounting leaders can pinpoint bottlenecks in the invoice approval process and take proactive steps to mitigate delays. Identifying opportunities for automation or optimization can increase operational efficiency and drive cost savings.
Knowing how long it takes an invoice to go through each stage of processing allows businesses to set realistic expectations with vendors and clients. It enables them to establish more accurate payment timelines and avoid potential disputes or late payments.
AvidXchange now offers AvidAnalytics, an embedded BI solution with interactive, immersive dashboards allowing users to drill down into areas of interest to gain more actionable insights. For example, the Approval Metrics dashboard quantifies the average number of business days it takes for an invoice to be entered or approved. The Workflow Summary reports the average workflow business days by user, entity or supplier.
By embracing business analytics in their accounting practices, organizations can unlock actionable insights that drive better decision-making. With a clear understanding of their invoice management timeline, businesses can improve overall financial performance while fostering stronger relationships with stakeholders.
Click below to schedule a demo and to learn more about how AvidAnalytics helps you understand and take control of your invoice management process.