Top KPIs accounts payable and accounts receivable teams should be tracking

Accounts payable KPIs (key performance indicators) serve as vital measurements of your vendor payment and invoice processing efficiency. These benchmarks act as your financial compass, revealing how well your accounts payable team manages everything from invoice processing to payment execution. By tracking these metrics, you gain clear insights into your payment operations, helping you identify bottlenecks, spot cost-saving opportunities, and maintain strong vendor relationships. Just as a dashboard helps you drive a car effectively, AP KPIs provide the visibility you need to steer your business toward better financial performance and operational excellence.

Accounts receivable KPIs (key performance indicators) serve as vital measurements of your customer payment collection and invoice management efficiency. These numbers act as your revenue radar, revealing how effectively your accounts receivable team converts sales into cash and manages customer relationships. By tracking these metrics, you gain clear insights into your collection operations, helping you identify payment delays, spot high-risk accounts, and maintain healthy cash flow. Just as a weather forecast helps you prepare for the day ahead, AR KPIs provide the visibility you need to steer your business toward better financial health and sustainable growth.

Measuring success in finance isn't just about counting dollars — it's about understanding the story behind every payment going in and out of your business. Key performance indicators in accounts payable and receivable illuminate this story, transforming raw numbers into actionable insights that drive better business decisions. These metrics reveal patterns and trends that might otherwise go unnoticed, helping businesses spot opportunities for improvement and identify potential problems before they escalate.

For accounts payable teams, KPIs shine a spotlight on vendor payment efficiency and cost management, while accounts receivable KPIs act as early warning signals for potential cash flow issues. In AP, these metrics show whether you're capturing early payment discounts, how quickly invoices move through approval, and where bottlenecks might be costing you money. On the AR side, they help you spot collection problems before they become crises, identify consistently late-paying customers, and determine if your payment terms are working in your favor.

The real power of KPIs lies in their ability to drive continuous improvement across your financial operations. When teams have clear metrics to work toward, they naturally focus on activities that move those numbers in the right direction. Modern financial software has made this easier than ever, providing real-time dashboards that let you monitor performance at a glance and make data-driven decisions about process improvements. This immediate feedback loop helps transform both AP and AR from reactive cost centers into proactive strategic assets that contribute to your company's financial success.

Tracking KPIs for accounts payable and receivable transforms your financial operations from guesswork into strategic decision-making. By monitoring AP KPIs, you gain clear visibility into vendor payment efficiency, helping you strengthen supplier relationships through timely payments, capture early payment discounts, and improve business cash flow. These metrics provide a comprehensive view of your payment operations, enabling you to improve accounts payable reconciliation, reduce processing costs, and maintain strong vendor partnerships that can benefit your business in the long run.

Meanwhile, AR KPIs reveal crucial patterns in customer payment behavior, enabling you to spot potential collection issues early, maintain steady cash flow, and make informed decisions about credit terms. This visibility helps you identify which customers consistently pay on time, which ones might need adjusted payment terms, and where your collection process could be more efficient. Together, AP and AR KPIs act as your financial compass, guiding decisions about everything from payment terms to process improvements, ultimately helping you build a stronger, more financially stable business.

Managing accounts payable effectively requires more than just paying bills on time — it demands a strategic approach backed by data. These 10 KPIs will help you transform your AP department from a cost center into a value-driving operation.

1. Time for processing a single invoice

The journey of an invoice from receipt to payment tells a crucial story about your operational efficiency. This KPI measures how long it takes for an invoice to move through your system, from initial receipt to final payment approval. By tracking processing time, you can identify bottlenecks, streamline workflows, and reduce delays that might strain vendor relationships. A decreasing trend in this metric often indicates improving efficiency, while increases may signal the need for process improvements or additional training.

2. Number of invoices processed per day per AP employee

Productivity matters, especially in accounts payable. This KPI reveals how efficiently your team handles invoice volume, helping you make informed decisions about staffing levels and workload distribution. When tracked consistently, it helps identify whether your team needs additional support, process improvements, or technology upgrades to maintain optimal performance.

3. Percentage of invoices related to a purchase order

Purchase order matching serves as your first line of defense against payment errors. This KPI tracks how many invoices have corresponding purchase orders, helping ensure spending stays within approved limits. A high percentage indicates strong procurement controls, while a low percentage might signal the need for better purchase order compliance or improved procurement processes.

4. Invoice exception rate

Invoice exceptions slow down processing and increase costs. This KPI tracks how often invoices require special handling due to discrepancies, missing information, or approval issues. By monitoring exception rates, you can identify common problems and implement solutions like vendor training, improved documentation requirements, or updated approval workflows.

5. Average days to pay invoices

Payment timing directly impacts both vendor relationships and cash flow. This KPI helps you balance the benefits of early payment discounts against cash flow needs. It also helps ensure you're meeting payment terms and maintaining strong vendor relationships. Monitoring this metric can reveal opportunities to negotiate better payment terms or capture more early payment discounts.

6. Early payment discount capture rate

Money saved is money earned. This KPI tracks how effectively your team captures available early payment discounts, directly impacting your bottom line. By monitoring discount capture rates, you can identify opportunities to improve cash flow and strengthen relationships with vendors who offer favorable terms.

7. Cost per invoice processed

Understanding the true cost of processing invoices helps drive strategic decisions about technology investments and process improvements. This KPI includes all related expenses — staff time, technology costs, and overhead. By tracking this metric, you can better evaluate the ROI of automation initiatives and identify areas for cost reduction.

8. Vendor satisfaction rate

Happy vendors often translate to better service and more favorable terms. This KPI measures how satisfied your vendors are with your payment processes and communication. Regular surveys and feedback sessions can help track this metric and identify areas for improvement in your vendor relationships and help you get closer to achieving vendor payment automation.

9. Rate of electronic invoice adoption

Digital transformation starts with electronic invoicing. This KPI tracks the percentage of invoices received electronically versus paper format. Higher electronic adoption rates typically lead to faster processing times, fewer errors, and lower costs. Monitoring this metric helps guide vendor onboarding strategies and digital transformation initiatives.

10. Audit compliance rate

Compliance isn't optional in accounts payable. This KPI measures how well your processes adhere to internal controls and external regulations. It tracks the percentage of invoices that pass audit requirements without issues. A high compliance rate indicates strong processes and controls, while a lower rate might signal the need for additional training or process improvements.

Just as accounts payable KPIs help optimize your payment processes, tracking the right metrics in accounts receivable is crucial for maintaining healthy cash flow and strong customer relationships. Let's explore the essential KPIs that will help you master your accounts receivable operations.

1. Days sales outstanding (DSO)

At the heart of accounts receivable performance lies DSO — the average number of days it takes to collect payment after a sale. This crucial metric directly impacts your cash flow and working capital. By tracking DSO trends, you can spot collection issues early, adjust credit policies when needed, and make more accurate cash flow forecasts. A decreasing DSO typically indicates improving collection efficiency, while increases may signal the need for more robust collection practices.

2. Collection effectiveness index (CEI)

The Collection Effectiveness Index goes beyond basic payment timing to measure how successfully your team converts receivables into cash. This comprehensive metric considers both current and overdue accounts, providing a clearer picture of collection performance. A higher CEI indicates stronger collection practices, while a lower score might suggest the need for process improvements or additional collection resources.

3. Percentage of overdue invoices

Late payments can strangle your cash flow. This KPI tracks the proportion of invoices that remain unpaid beyond their due date, helping you identify patterns in late payments and adjust collection strategies accordingly. A high percentage of overdue invoices might indicate problems with your credit policies, invoice clarity, or collection processes.

4. Average days to collect payments

Understanding how long it typically takes to collect payments helps you manage cash flow more effectively. This KPI measures the average time between invoice issuance and payment receipt, providing insights into collection efficiency and customer payment behavior. By monitoring this metric, you can better predict cash inflows and identify opportunities to speed up collections.

5. Bad debt to sales ratio

No business wants to write off unpaid invoices, but tracking your bad debt ratio helps assess the effectiveness of your credit policies. This KPI measures the percentage of sales that become uncollectible, helping you evaluate credit risk and adjust policies as needed. A rising bad debt ratio might signal the need for stricter credit requirements or more aggressive collection efforts.

6. Invoice dispute rate

Disputes delay payments and strain customer relationships. This KPI tracks how often customers question or contest invoices, helping identify common issues that lead to payment delays. By monitoring dispute patterns, you can improve billing accuracy, clarify payment terms, and enhance customer communication.

7. Customer satisfaction rate

Happy customers typically pay faster. This KPI measures how satisfied customers are with your billing and collection processes. Regular surveys and feedback can help track this metric while identifying areas for improvement in your customer service and communication strategies.

8. Cost of collections

Understanding what it costs to collect payments helps optimize your AR operations. This KPI includes all collection-related expenses — staff time, technology costs, and third-party services. Tracking these costs helps evaluate the ROI of collection initiatives and identify opportunities for efficiency improvements.

9. Write-off rates

Sometimes invoices become uncollectible, but tracking write-off rates helps minimize these losses. This KPI measures the percentage of receivables you're forced to write off as uncollectible. High write-off rates might indicate problems with credit policies, collection procedures, or customer financial health.

10. Ratio of new customers to old customers

Customer mix matters in accounts receivable. This KPI helps you understand how your customer base is evolving and how it affects payment patterns. New customers often require more attention in collections, while established customers typically have more predictable payment habits. Monitoring this ratio helps adjust collection strategies and resource allocation accordingly.

By tracking these AR KPIs alongside your AP metrics, you create a comprehensive view of your company's financial operations. These insights help optimize cash flow, strengthen customer relationships, and drive strategic decisions about credit and collection policies. Remember, successful AR management isn't just about collecting payments — it's about building sustainable customer relationships while maintaining healthy cash flow.

Managing accounts payable metrics and accounts receivable KPIs can feel overwhelming, but Brex's comprehensive financial platform streamlines this process through intelligent automation and real-time tracking capabilities. Whether you're monitoring invoice processing times or tracking collection effectiveness, Brex provides accounts payable automation software to improve your financial metrics and make data-driven decisions.

For accounts payable KPIs, Brex's automated invoice processing system significantly reduces the time and effort required to handle vendor payments. The platform automatically captures invoice data, routes approvals through customizable workflows, and maintains detailed payment records to help you keep track of invoices and payments. This automation helps improve critical metrics like invoice processing time, exception rates, and early payment discount capture and helps prevent duplicate payments in accounts payable. With features like automated 2-way matching and vendor management tools, your team can focus on strategic tasks while maintaining strong supplier relationships. You can also use a Brex business account to create dedicated accounts to manage accounts payables, accounts receivables, and payroll, each with their own auto-transfer rules.

Nishant Karandikar, Strategy and Operations Lead at Limelight Steel, lauds Brex’s invoice approval capabilities: “Any invoice that needs approval is automatically routed to me. Now I just have a once-a-week approval system where I click on the bills, verify that they're legitimate, and pay them in the specified time window. Brex bill pay helps ensure that I'm not the bottleneck on our procurement.”

The real power of Brex is in its ability to provide comprehensive insights across AP and AR operations. Through customizable dashboards and automated reporting, you can monitor all 20 essential KPIs in real time, helping you make informed decisions about everything from payment timing to collection strategies. Brex’s integration capabilities ensure that your financial data stays synchronized across systems, providing accurate, up-to-date information when you need it most.

Your KPIs tell the story of your business's financial health — let Brex help you write a success story. Stop struggling with manual tracking and delayed insights. Experience how Brex's automated platform can automate accounting processes and transform your AP and AR operations from cost centers into strategic advantages. Sign up for Brex now to see how our intelligent automation and real-time analytics can help you capture more early payment discounts, reduce processing times, and make better financial decisions for your business.

Still handling vendor payments manually? Brex bill pay leverages AP automation to transform how businesses manage their critical business payments. Let's explore why growing companies are making the switch.

Save valuable time

Manually processing invoices consumes endless hours of your finance team's time. From data entry to approval routing to payment processing, these tedious tasks eat into time better spent on strategic work. Brex eliminates these manual steps through intelligent automation, giving your team the freedom to focus on initiatives that drive business growth.

Maintain better control

Tracking payment statuses and monitoring spending becomes challenging with paper-based processes. Brex changes this by providing real-time visibility into your payables along with detailed spending insights. You'll know exactly where every payment stands — improving your cash flow management processes — while custom approval workflows ensure proper oversight without creating bottlenecks.

Reduce payment errors

Manual data entry inevitably leads to mistakes — from duplicate payments to mistyped amounts that cost your business money. Brex's intelligent validation spots these issues before they impact your bottom line. By catching duplicate invoices and validating payment details automatically, the software helps prevent duplicate payments in accounts payable and maintain accuracy.

Simplify accounting

Month-end reconciliation shouldn't require long hours of matching transactions. Brex eliminates accounts payable reconciliation headaches by syncing directly with your accounting software. Every payment automatically flows into the right accounts with proper coding, making your monthly close faster and more accurate.

Strengthen vendor relationships

Nothing strains vendor relationships like late or incorrect payments. Brex helps you maintain strong partnerships through reliable, on-time payments and clear communication. Automated payment scheduling ensures vendors get paid when promised, while easy access to payment histories makes answering vendor questions simple.

Scale with confidence

Your AP needs will grow alongside your business. Brex provides the flexibility to handle increasing invoice volumes without adding complexity. The software combines powerful features with intuitive design, creating an AP solution that grows with you while remaining easy to use.

As businesses continue to improve their financial operations, automated AP processing is essential for maintaining a competitive advantage. Brex's comprehensive solution helps companies of all sizes work smarter while maintaining the controls they need to grow confidently.

Before switching to Brex, Alchemy struggled with fragmented financial systems that slowed down their month-end close. The web3 developer platform used separate solutions for corporate cards, invoicing, and reimbursements — none of which worked together seamlessly.

The challenge of disconnected systems

Alchemy's finance team juggled multiple platforms: Bill.com for invoices, Bank of America for corporate cards, and a payroll provider for expense reimbursements. This fragmented approach created significant manual work and made it difficult to track spending accurately. Without integration between systems, the team lacked visibility into real-time financial data.

Finding a unified solution

"Having a unified approach to all of our spend has helped bring everything together," explains Sean Soper, Alchemy's Head of Accounting and Financial Operations. By consolidating its entire financial workflow onto Brex's platform, Alchemy gained control over everything from virtual cards to wire transfers in one place.

The impact: Beyond time savings

The results speak for themselves. Alchemy now saves up to 3 days on its monthly close process. But the benefits extend far beyond faster closing:

• Employees save two hours monthly on expense reimbursements
• Real-time spending insights enable better financial decisions
• Automated receipt matching and coding reduce manual work
• Direct ERP integration maintains accurate financial records

Building for the future

For Alchemy, scalability was key in choosing their new financial platform. “We wanted a solution that would grow alongside us,” Soper notes. With features like programmatic controls and unlimited virtual cards, they found a platform that could support their expansion while maintaining financial efficiency.

The competitive edge

Alchemy’s story shows how the right financial tools can transform business operations. "By consolidating expenses, we can optimize our spending, make more informed decisions on the fly, and improve our bottom line,” Soper explains. In today's fast-moving business environment, that kind of financial agility isn't just convenient — it's essential for growth.

The lesson is clear: When companies break free from fragmented financial systems, they gain more than just efficiency. They position themselves for smarter growth and better financial decisions.

Choosing the right accounts payable software is key for businesses looking to streamline their financial operations. From small business solutions like FreshBooks to enterprise platforms like NetSuite, each option offers unique features to track accounts payable metrics and match different business needs. The key is finding software that aligns with your current requirements while providing room for growth.

Brex stands out by offering more than just AP automation. Its unified platform combines powerful accounts payable features with comprehensive spend management and a flexible corporate card. This integrated approach eliminates the fragmentation that plagues many businesses, providing real-time visibility into company spending while simplifying workflows for finance teams.

Ready to transform your financial operations? Join forward-thinking companies like Alchemy who have revolutionized their payment processes with Brex. Whether you're looking to save time on monthly closes, gain better spending insights, or improve how you keep track of invoices and payments efficiently, Brex provides the tools you need to succeed.

Sign up for Brex today to streamline your accounts payable process, automate manual tasks, and take control of your company's spending — all in one powerful platform.