Do metrics really matter? Isn’t ignorance supposed to be bliss? When it comes to managing an organization’s payments strategy, nothing could be further from the best practice. Since I will be doing the analysis for AP Now’s 2016 Payment Survey, I was thinking about why organizations should be tracking B2B payment metrics and where they might start. You could say the why boils down to cost.
Every organization wants to minimize its costs, but many lack the necessary metrics to support this goal. For example, to start determining the impact your B2B payments have on the bottom line, know the:
- hard- and soft-dollar costs associated with your procure-to-pay (P2P) processes
- number of payments by payment method (per month, quarter and year)
Create a plan, including a policy, to shift your organization away from costly check payments and toward electronic payments.
Where Does Your Organization Stand?
By taking the quick (less than 15 minutes) payments survey by AP Now, you will receive results to gain insight into how your organization compares to others. Note: The survey closed February 2, after this post was published.
Building or Refining a Metrics Plan
Following are some exploratory questions to help you make the most of metrics.
- What metrics are most relevant, based on current goals? Metrics allow organizations to derive key performance indicators (KPIs) for evaluation purposes. Avoid going overboard and obtaining a bunch of numbers that are not used or necessary.
- Where is the data available? How easy or difficult is it to obtain?
- How does your organization utilize the information and how often? Sadly, metrics data often ends up getting filed away and forgotten. A better question is, how can your organization utilize metrics?
- Who are the parties responsible for providing the data, analyzing it and sharing the results?
- Who should receive the results and in what format? For the C-Suite, a consolidated dashboard visually depicting KPIs is ideal.
- What are the acceptable minimum thresholds for each metric or KPI? When would remedial action or further research be needed? Pay particular attention to any metric anomalies compared to a previous period.
About the Author
Blog post author Lynn Larson, CPCP, is the founder of Recharged Education. With more than 15 years of Commercial Card experience, her mission is to make industry education readily accessible to all. Learn more…
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