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.
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
- 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.
- 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.
- 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.
- 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.
- 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.
- 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