The best accounts payable (AP) departments are 50 times as productive as the least efficient. What do they do that the others don’t? Forrester’s survey of AP leaders shows that there is no silver bullet – excellence comes from a combination of several best practices, including centralizing responsibility and implementing good technology. The common theme for all of them was focus on the complete procure-to-pay (P2P) process, rather than merely on the invoice-to-pay sub-process.

Key findings
Forrester's study showed:

• There is a wide variation in AP invoice processing efficiency... Scores for the key performance indicator (KPI) ‘Invoices processed per full-time equivalent (FTE) per year’ ranged from as low as 1,000 to as high as 50,000, with an even spread across the sample.
  
  
• ...yet half of the bottom quartile erroneously think they have an efficient process. The worst performing AP departments don’t seem to realize how far they lag behind their peers. In fact, respondents with good scores were more willing to see further improvement opportunities.
  
  
• Several good practices correlate with good performance, but don’t guarantee it. We analyzed the impact of several factors, including technology and processes, on AP performance. Although applying individual best practices made respondents more likely to report good or excellent results, some who appeared to be doing the right things still admitted poor numbers.
  
  
• Combining e-Invoicing and eProcurement makes success twice as likely. Persuading suppliers to send invoice electronically cuts manual data capture tasks, such as document scanning and data entry. Even without that, use of eProcurement reduces discrepancies and hence the clerical time wasted on resolving them. Together, these two process improvements combine to maximize straight through processing (STP), whereby the AP system approves invoices for payment without any human intervention.
  
  
• Centralizing responsibility for AP enables process improvement. All the respondents with over 500,000 invoices per year, and 29 of the 30 with over 200,000, reported more than 15,000 invoices per FTE. Only four were shared service centers, so this isn’t the result of transplanting clerks from business units (BU) to a big building in a low cost country. Finance managers responsible for a large division or an entire company could implement better technology and processes than those operating at BU level, without creating a physical and cultural gulf between AP and the rest of the business.