12 accounts payable metrics your team should be tracking

Accounts payable metrics show how well a company handles its bills and payments. They track things like how quickly the company pays vendors, how accurately it processes invoices, and how well it manages its money. By monitoring these metrics, organizations can identify operational bottlenecks, improve business cash flow, reduce costs, and strengthen vendor relationships.

Tracking accounts payable metrics will help you maintain financial health and operational efficiency in your organization. By monitoring these key performance indicators, businesses can spot bottlenecks in any payment processes, reduce operational costs, and make data-driven decisions about resource allocation and process improvements. If you don't track these numbers, you risk wasting money, missing problems in your processes, and jeopardizing vendor relationships due to late payments or poor communications.

Two primary benefits of tracking AP metrics are cost control and cash flow optimization. By monitoring metrics like cost per invoice and days payable outstanding (DPO), you can better manage your working capital and identify opportunities for early payment discounts. Understanding processing costs helps justify investments in automation technology and process improvements that can reduce operational expenses. Additionally, tracking payment timing and discount capture rates enables businesses to make more informed decisions about when to pay vendors, which is key to optimizing cash flow and maintaining strong supplier relationships.

Your accounts payable metrics tell a story about operational efficiency, vendor relationships, and financial health – but are you tracking the right numbers? From Fortune 500 companies to fast-growing startups, leading finance teams monitor these 12 key metrics to cut costs, accelerate processing times, and turn their AP department into a competitive advantage.

1. Invoice processing time

Invoice processing time is the duration from when an invoice is received until it's ready for payment. This metric directly impacts cash flow management and vendor satisfaction, as faster processing enables better payment timing and strengthens the relationship with that vendor. To measure this effectively, track both the total time and individual processing stages. This is typically the metric organizations use to identify bottlenecks, optimize workflows, and improve overall AP efficiency.

2. Total number of invoices received

Tracking invoice volume provides insights into workload patterns and operational demands. By monitoring monthly and seasonal fluctuations, organizations can better allocate staff resources and plan for peak periods. Regular analysis helps identify trends that can inform staffing decisions, technology investments, and process improvements. This metric proves valuable data for budgeting, capacity planning, and determining when to scale AP operations.

3. Processing cost per invoice

This figure calculates the total expense of processing a single invoice, including labor, technology, and overhead costs. Understanding these costs helps organizations identify potential savings and justify automation investments. By breaking down costs into specific components, you’ll have a baseline to use to target improvement efforts and measure the impact of efficiency initiatives. This insight drives informed decisions about resource allocation and process optimization. General estimates for processing an invoice typically range from $12 to $40 but can vary by industry.

4. Invoice error rate

The invoice error rate tracks the percentage of invoices containing mistakes that require correction. High error rates cause businesswide ripple effects, including increased operational costs, and are a clear symptom of inefficient processes. To reduce errors, implement automated validation checks, standardize invoice formats, and provide staff training. The benefits of getting this metric under control include improved accuracy, reduced processing delays, faster payments, and happier vendors.

5. Percentage of invoices paid on time

On-time payment performance directly affects vendor relationships and available discounts. This metric tracks the proportion of invoices paid within the agreed-upon terms. To improve performance, establish clear payment policies, automate approval workflows, and monitor payment deadlines. Everyone likes to be paid on time, and vendors want to work with those who do so reliably. In fact, continuing to improve this metric can earn you early payment discounts.

6. E-invoice adoption rate

Electronic invoicing expedites processing and reduces errors associated with manual intervention. This metric measures the percentage of invoices received electronically versus in a paper format. Higher e-invoice rates lead to faster processing times and reduced costs. To increase adoption of e-invoices, offer vendor incentives, provide training resources, and demonstrate the benefits of digital submission.

7. Days payable outstanding (DPO)

DPO represents the average time taken to pay suppliers, calculated by dividing accounts payable by the cost of goods sold and multiplying by the number of days in the period. This metric helps improve working capital management. Example: ($500,000 AP ÷ $3,000,000 COGS) × 365 = 61 days. Organizations use DPO to balance cash flow with vendor relationship management.

8. Supplier query resolution time

This metric measures how quickly AP teams resolve vendor inquiries. Fast resolution times indicate efficient communication and good business hygiene. To make this your competitive advantage, establish clear communication channels, maintain detailed documentation, and prioritize query handling. Tackling this metric will reduce payment delays and improve vendor relationships.

9. Payment processing time

This metric tracks the duration between payment approval and disbursement. Quick processing helps improve vendor satisfaction and opens up opportunities for early payment discounts. Best practices include automating payment processes, establishing clear approval hierarchies, and regular workflow reviews. Organizations use this data to optimize payment timing through vendor payment automation and strengthen vendor relationships.

10. Percentage of discounts taken

This metric tracks your business’s captured early payment discounts against available opportunities. By monitoring discount capture rates, organizations can evaluate the effectiveness of their payment strategies. Regular analysis helps identify missed opportunities and optimize payment timing for maximum savings. This metric directly impacts bottom-line performance.

11. Vendor management efficiency

This metric evaluates overall vendor relationship management, including onboarding time, communication effectiveness, and satisfaction levels. Efficient vendor management reduces administrative costs and strengthens supply chain relationships. Track metrics like vendor response times, documentation accuracy, and satisfaction scores to identify improvement areas.

12. Compliance rate

Compliance in AP encompasses adherence to internal policies and external regulations. This metric tracks policy compliance, proper authorization levels, and accurate documentation. Regular monitoring helps prevent fraud, reduces audit findings, and maintains organizational integrity. Organizations rely on this metric to manage risk and ensure proper financial controls.

The difference between average and exceptional accounts payable performance often comes down to knowing exactly what to measure and how to act on those insights. Take control of your AP operations today by tracking these essential metrics, and use the data to build a more efficient, cost-effective payment process that supports your company's growth.

Establishing effective accounts payable goals begins with a thorough assessment of your current operations. Start by gathering baseline data on key metrics like invoice processing times, error rates, and processing costs. This information helps identify areas needing improvement and ensures your goals address real operational challenges rather than perceived issues. For instance, if data shows your team takes an average of 15 days to process invoices, you might set out to reduce this to 10 days through specific process improvements.

When setting specific goals for your accounts payable process, follow the SMART framework to ensure each objective is properly structured for success. Make them Specific (reduce invoice processing cost from $15 to $10 per invoice), Measurable (increase electronic invoice adoption rate to 80%), Achievable (improve on-time payment rate to 95%), Relevant (reduce duplicate payments to less than 0.1%), and Time-bound (achieve these targets within six months). This approach lays out clear, actionable goals that teams can effectively work toward.

Prioritize goals based on their potential impact on both efficiency and bottom-line results. Consider setting goals in three key areas: operational efficiency (reducing processing times), cost management (lowering processing costs), and risk mitigation (improving compliance rates). Try to break down larger objectives into smaller, manageable milestones. For example, if your ultimate goal is 100% electronic invoice processing, set intermediate targets like achieving 50% in three months, 75% in six months, and 100% in one year.

Regular monitoring and adjustment keep goals relevant and achievable. Establish a routine for tracking progress through key performance indicators (KPIs), and schedule regular reviews to assess performance and adjust targets as needed. Be sure to celebrate achievements when milestones are reached, and analyze shortfalls to understand any blockers and get incrementally better. Remember to align AP goals with broader organizational objectives — if your company focuses on improving cash flow, prioritize goals around optimizing payment timing and capturing early payment discounts.

Every accounts payable team faces operational challenges that can impact efficiency, vendor relationships, and financial performance. Let's explore the five biggest challenges AP teams encounter and how teams can overcome them.

Manual data entry and paper-based processes

One of the most significant challenges AP teams face is managing paper-based invoices and manual data entry requirements. This legacy approach leads to high error rates, lost documents, and time-consuming data entry tasks, and AP staff often spend countless hours manually inputting invoice data, reconciling discrepancies, and searching for missing documentation. This reliance on paper processes not only slows down operations but also increases processing costs and creates storage challenges. Moving away from these manual processes requires careful planning and investment in accounts payable software, but many organizations struggle with the transition.

How to overcome this challenge

Brex's automated invoice processing eliminates the burden of paper-based workflows and manual data entry and accelerates payments. The platform automatically captures and validates invoice data through advanced OCR technology, transforming traditional paper processes into streamlined digital operations. By digitizing invoices at the source, AP teams can redirect their time from tedious data entry to more strategic financial activities, while significantly reducing processing errors.

Invoice approval delays and communication bottlenecks

The invoice approval process can quickly become a complex maze of email chains, Slack threads, missing approvals, and overall communication failures. When approvers are unavailable or documents get stuck in approval limbo, payments get delayed, leading to vendor dissatisfaction and missed early payment discounts. Teams then struggle to track the status of the invoice, especially when dealing with multiple departments and approval levels. These delays strain vendor relationships, create cash flow management challenges, and increase the risk of late payment penalties.

How to overcome this challenge

To tackle the complex maze of approval workflows, Brex's bill pay automation introduces customizable routing rules and instant notifications. Approvers can review invoices from anywhere, while built-in collaboration tools keep all communication within one platform. This reduces reliance on email and Slack and creates clear visibility into each invoice's status, automatically escalating delayed approvals to keep payments on track and vendor relationships strong.

“Paying bills was one of the most annoying things for me as a founder. There were so many bills coming from everywhere, and we were getting hit with a ton of late fees because it was so difficult to manage. Brex bill pay helped eliminate the least fun part of my job, and we’re saving 20-30% because Brex’s automation put an end to all the late fees we were paying.” — Sahil Hasan, CEO and Co-Founder, Dots

Limited visibility and data access

Many AP teams struggle with limited visibility into invoices and payments and lack real-time access to important financial data. Without clear insights into invoice status, payment schedules, and cash flow projections, it’s impossible to make informed decisions and respond to vendor inquiries promptly. This lack of transparency makes it challenging to track payment status, analyze performance metrics, and eliminate bottlenecks. Additionally, when data is scattered across different platforms or stored in paper files, gathering information for audits or financial reporting becomes a manual, time-consuming task.

How to overcome this challenge

Addressing the critical need for transparency, Brex's AP automation software provides comprehensive, real-time visibility into the entire accounts payable process. Through detailed dashboards showing invoice status, payment schedules, and performance metrics, teams have immediate access to the data they need to make decisions. This enhanced visibility enables proactive cash flow management and faster responses to vendor inquiries, transforming AP from a reactive to a strategic function.

Fraud prevention and compliance management

AP departments face increasing pressure to prevent fraud while maintaining compliance with various regulations and internal controls. Teams must carefully validate invoices, verify vendor information, and ensure proper payment authorization while managing the risk of duplicate payments and fraudulent invoices. Maintaining audit trails, documenting policy exceptions, and keeping up with changing regulations adds another layer of complexity to daily operations. The challenge becomes even greater when working with manual processes that make it difficult to implement consistent controls and track compliance.

How to overcome this challenge

To combat increasing fraud risks and compliance demands, Brex's automated invoice processing incorporates sophisticated validation checks and controls. The platform automatically detects duplicate invoices, validates vendor information, and enforces proper authorization protocols. Automated audit trails document every action, while standardized workflows ensure consistent policy enforcement, significantly reducing risk while simplifying audit preparation.

Vendor management and query resolution

Managing vendor relationships and handling supplier inquiries consumes significant time and resources. AP teams must deal with various invoice formats, different payment terms, and frequent vendor queries about payment status. Maintaining accurate vendor master data, managing vendor onboarding, and ensuring timely communication with suppliers presents ongoing challenges. When combined with limited visibility into invoice status and payment information, resolving vendor queries becomes even more complex. Teams often struggle to balance maintaining good vendor relationships while efficiently managing their workload and meeting internal processing requirements.

How to overcome this challenge

In terms of vendor management best practices, paying vendors on time should be one of your top priorities. Brex's automated bill payment solution revolutionizes vendor relationship management through consistent, timely payments and improved communication. The platform maintains centralized vendor records and standardizes payment processes while providing clear payment status updates. This comprehensive approach not only improves vendor satisfaction but also reduces the time spent on routine payment tasks and inquiry resolution, allowing AP teams to focus on building stronger supplier relationships.

Legacy AP processes burden businesses with endless manual data entry, delayed approvals, and limited visibility into cash flow. But there's a better way. Modern solutions like Brex are transforming how finance teams track accounts payable metrics and optimize procurement processes.

Through seamless automated workflows, Brex helps you manage all your spending, invoiced or otherwise, in one place. Brex automatically captures and validates invoice data, routes approvals intelligently to prevent bottlenecks, and gives you real-time visibility into every payment. AI-powered fraud prevention and compliance controls protect your business, while native vendor management tools help you maintain strong supplier relationships through consistent, timely payments.

The best part: Brex is a single, comprehensive spend management platform, so you don’t need multiple solutions for bill pay automation, purchase cards, and travel and expense management. This approach simplifies your AP processes and helps your teams use accounting automation to close the books faster.

Liz Braman, CEO of Revolution RE, says Brex helps simplify contractor invoicing and payments: “One of the business challenges we were facing was having a lot of contractor payments to make each month and organizing the process of those payments,” she said. “Now we receive all of our invoices directly sent into the Brex's interface, and we can review, approve, and pay all of our contractors all in one place, and that saves us a ton of time.”

Modernizing your AP processes doesn't have to be complicated. Sign up for Brex today and give your finance team the tools they need to work smarter, not harder.