The 6 #APAutomated Metrics Your CEO Actually Cares About

Depending on the size of the company, very rarely do I interact with the CEO. I don’t know if it’s because they don’t care about Accounts Payable processing or if they just have other things to do… you know – well delegated.

They know…

CEO’s know the importance of Accounts Payable. I haven’t met a CEO yet that’s didn’t care about their organization’s expenses and knowing what those expenses are. I am not 100% sure that CEO’s in general care about the process of Accounts Payable. Below are six metric that will give a CEO information they can use to run the company.

Here are 6

  1. ROI – Initially, CEO’s use return on investment to make sure the project was successful. ROI is a great, simple, benchmark that gives you a thumps up or thumps down on an AP Automation project.
  2. DPO – This stands for days payable outstanding. DPO measures the efficiency of how the company pays its suppliers. For CEO’s this is a great tool to watch the accounting team overall… not that we need it.
  3. CPI – I know you knew this would be one of the metrics. I can’t write an article without mentioning cost per invoice. Even though CPI is a component of ROI the reason the CEO would like this measurement is to know how the company’s expense based processes are doing. CPI will tell the CEO on a frequent basis how much the process cost the company.
  4. Cycle Time – Similar to DPO, cycle time (sorry for no three-letter acronym – TLA) focuses on the approval process, so it has the ability to, with a number, measure the efficiency of the staff rather than the entire process.
  5. Discounts – There are a lot of ways to slice this number but the way that I recommend and CEO’s seem to really like are how many discounts were captured for a particular time (usually a week or a month) and the discounts that can be captured on a certain day or week.
  6. Late Fees – I know this is a negative number that sometimes we don’t want (as accountants) anyone to know, but the CEO should know. Too many late fees or late fees from a certain type of invoice is an entire business problem.. not just accounting. The whole business should be part of the solution too.

Just the CEO?

Normally when I write about the CEO it comes across as a single person. Although in most companies, it is a single person, however I think these metrics can work well for a leadership team or a board of directors. It’s a great way, once you are automated, to dispense information to show process.

Want to know more? Buy My Books!

To buy the book – The Argument to Automate – How Innovation Can INSPIRE Not Fire – click here to buy

(Also) To get your copy of The 8 Pitfalls of Accounts Payable Automation – click here to buy

4 Comments

  1. […] I think is an interesting fact, in working with over 2,000 companies this is the group that thinks Accounts Payable Automation is for them, but it is not. Now, don’t get me wrong there are a tremendous amount of positive […]

  2. […] that there are certain companies that do certain things better than others. To better explain, Accounts Payable Automation can be split into several […]

  3. […] I think is an interesting fact, in working with over 2,000 companies this is the group that thinks Accounts Payable Automation is for them, but it is not. Now, don’t get me wrong there are a tremendous amount of positive […]

  4. […] that there are certain companies that do certain things better than others. To better explain, Accounts Payable Automation can be split into several […]

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