What are the most common mistakes in measuring invoice processing metrics?

1 Mistake 1: Not defining clear goals and benchmarks

One of the first steps in measuring invoice processing metrics is to define what you want to achieve and how you will measure it. Without clear goals and benchmarks, you will not be able to evaluate your progress, identify gaps, or compare your performance with industry standards or best practices. For example, if your goal is to reduce invoice processing costs, you need to establish a baseline cost per invoice and a target cost per invoice, as well as the factors that influence this metric, such as invoice volume, complexity, automation, and error rates.

3 Mistake 3: Not using a balanced set of metrics

A balanced set of metrics is one that covers different aspects of your invoice processing performance, such as efficiency, effectiveness, and quality. If you only use one or a few metrics, you might miss out on important insights or trade-offs that affect your overall performance. For example, if you only measure the average time to process an invoice, you might overlook the variation in processing time for different types of invoices, or the error rate that might increase as you speed up your processing. Therefore, you should use a balanced set of metrics that capture both the quantity and the quality of your invoice processing.

4 Mistake 4: Not standardizing and validating data sources and methods

Data quality and consistency are essential for measuring invoice processing metrics accurately and reliably. However, many businesses use different data sources and methods for collecting, calculating, and reporting their metrics, which can lead to discrepancies, errors, or biases. For example, if you use manual data entry or different software systems for capturing invoice data, you might introduce human errors or data inconsistencies that affect your metrics. To avoid this mistake, you should standardize and validate your data sources and methods, and use automated tools or systems whenever possible.

5 Mistake 5: Not communicating and acting on metrics

The final mistake is to measure invoice processing metrics but not communicate or act on them. Metrics are only useful if they are shared with the relevant stakeholders, such as your AP team, management, suppliers, and customers, and if they are used to inform decisions, actions, and improvements. For example, if you measure your invoice processing metrics but do not share them with your suppliers, you might miss out on opportunities to negotiate better terms, resolve issues, or enhance collaboration. Similarly, if you measure your invoice processing metrics but do not use them to identify and address problems, optimize processes, or implement best practices, you might waste time, money, and resources.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?