If CEO predictions are any indicator of what’s to come in the business world, buckle up, because we may be in for a bumpy ride. Here are three of the most influential KPIs for purchasing, invoicing, and expenses.
If CEO predictions are any indicator of what’s to come in the business world, buckle up, because we may be in for a bumpy ride. According to PwC’s annual CEO Survey, there’s been a 436 per cent increase in the number of CEOs saying they expect global economic growth to decline this year. Just 35 per cent said they are “very confident” about revenue prospects for the next year.
So, what’s a business leader to do? The most popular answer seems to be “look inside-out for profitability and growth.” Faced with economic uncertainty, finance and procurement executives are increasingly challenged to not only uncover and deliver savings opportunities, but also to reduce risk, support innovation agendas, and create levers for growth.
3 Digitisation KPIs to Measure Your Procurement and Expense Process Maturity
It’s important to set measurable goals to assess the maturity of your procurement and expenses processes. By analysing the largest accessible source of business spend data (the nearly US$1 trillion that flows through the Coupa platform), Coupa Business Spend Management (BSM) experts have identified 12 Key Performance Indicators to help you gain insight into and advance your organisation’s maturity across the spectrum of BSM processes, from sourcing to procurement to payments.
Here are three of the most influential KPIs for Purchasing, Invoicing, and Expenses and how companies with digitally mature processes are performing in these areas:
1. Purchasing KPI: Percentage of Electronic PO Processing: 89.7 per cent
What it is: The percentage of POs processed digitally measures the success of eProcurement initiatives designed to reduce PO processing time and employee and supplier frustration.
Why it matters: A high rate of digital POs often means that procurement teams have time to focus on strategic initiatives, like lowering risk and optimising productivity, instead of chasing lost orders.
2. Invoicing KPI: Invoice Approval Cycle Time: 30.7 hours
What it is: The average time, in hours, from the time of invoice submission to the time of final approval measures the efficiency of the entire approvals process.
Why it matters: A short invoice approval cycle time assures that there are no unnecessary project delays due to payment delays. It also enables early payment discounts and fewer status inquiries while decreasing the risk of late payment penalties.
3. Expenses KPI: Percentage of Manual Expense Audit: 6 per cent
What it is: The percentage of expense reports that go through human audit reflects the precision and accuracy of existing controls and compliance throughout the expenses management processes.
Why it matters: A low percentage of manual auditing implies that expense policies and automated audits are effectively ensuring compliance. Large numbers of manual audits place a costly administrative burden on AP teams.
Learn More About How to Use Benchmarking Data to Drive Success
Want to find out what the other nine KPIs are and find out how your organisation measures up? Read Coupa’s 2019 Benchmark Report to learn more about how focusing on improving these critical KPIs can help you improve profitability, streamline operations, and achieve efficient growth.
For extra credit, join us at Coupa’s next webinar! We’d love to see you at our discussion about Building A Strategic Procurement & Finance Alliance to Enable Growth with Levvel Research and Coupa CFO Todd Ford to explore how business leaders can use KPIs and benchmark data to reduce silos in the back office. We’ll also take a look at:
- New data on the state of procurement and finance collaboration
- Procurement and finance efficiency benchmarks of high-performing organisations
- Strategies for reducing departmental silos and creating spend management visibility
Reserve your spot today. We can’t wait to see you!