5 Signs Your AP Department is Doing A-OK

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I have been on a stretch lately where I have been writing about the pain that paper brings to an AP process. I would like to change that by writing about AP departments that are doing well and how you can benchmark your achievements.  This is my own personal crusade, but on occasion I get flak for writing about negative things. So, here goes my attempt…

New Leaf

Today is a new day. I am going to leave all of those negative things behind and only talk about positive things. It’s like the time a boy came home from school and his dad asked him how school went. The boy said, “Dad, not so good I think I failed a test.” The dad said, “Son, quit being so negative all the time… be positive.” The boy said, “Ok, dad, I am positive I failed that test.”

5 Signs You Are Doing Well

  1. Bills Are Paid On Time – I hate even putting this one on the list, but I had to. The reason I hate putting this on the list is because it is too obvious. I believe that people read my articles for the non-obvious stuff, but if your bills are getting paid on time, and you don’t have any (or few) late fees… you are doing well. This is also a good time for me to recommend that you go back and read my article on DPO and Cycle time.
  2. Getting Discounts – If your process is fast enough and approvals are getting done without a lot of re-classes, you’re doing well. You know I have a hypothesis that vendors give discounts because most AP processes are unable to act fast enough to capture those discounts. I believe that when more companies automate AP , we are going to see fewer discounts offered.
  3. Low Question Count – This is a very difficult one to capture, but the number of vendor calls you get per day is a great benchmark to track how well you are doing. I am in the middle of a study in which (at the moment) I am unable to draw any significant conclusions, but initial results say that a good number of calls per day is 6 per every 1000 invoices. More to come on that.
  4. No Paper – If you are a consistent reader of my stuff, you will know that having no paper in Accounts Payable is my thing. I don’t believe it’s a judgment call to write that if you don’t have paper in AP then you are doing well. Paper comes with so many habits that lead to the “not so good side.” No paper means you are doing really well.
  5. Big Raise – You're getting more money, a parking space, own washroom, and a seat in the executive dining room… oh wait--it’s not 1965 anymore and I’m not Don Draper, but if you are promoted because of your improved AP process, you are doing well.

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