Introduction
The role of the AP department is vital, and its efficient operation can positively affect the condition of the whole company. The company needs to pay the suppliers on time to sustain smooth cooperation with the vendors and perhaps to avoid troublesome situations such as, the delay of supplies’ shipment due to unpaid bills or, vice versa, the establishment of some new fees for the late payments.
Master your AP Dashboard with essential metrics and features to streamline costs and improve financial decision-making.
Another necessity is controlling the cash management and invoice processing costs. The accounts payable dashboard helps the accounts payable team track key figures and issues concerning the payments process so that any hitches can be kept at bay and the process can be well-oiled and adequately managed.
What is an Accounts Payable Dashboard?
Definition and key functions
Similar to the control panel and the light indicators in a plane cockpit, a dashboard provides details that the AP group requires to automate the AP procedure, watch over it, and guarantee the correct operations of the process. The areas of performance that an AP dashboard usually encompasses are KPI, summary data, alerts, trends, and a lot more, which are graphically represented in an AP dashboard. Ideally, the most effective one should provide updated live financial and operational data, customized based on the user’s function and preference and the ability to add other KPIs the user may require.
This serves as a reminder to the right people about the right metric defined in the AP dashboard. The availability of summarized AP data in real-time mode is helpful in enhancing the cash flow forecast, boosting profitability, and, therefore, assisting in managing the suppliers efficiently.
Benefits of using an AP dashboard
There are several ways that companies use to ensure that they track AP, and these include manual ways like the use of spreadsheet programs, Whiteboards, and Checklists. A sophisticated AP dashboard, incorporated into an accounting software solution, enables the AP group to become more strategic and proactive rather than a mere scanner of daily bills and expenses with weekly or monthly reporting to mainstream management. That’s because automated AP dashboards provide several benefits that older manual methods do not. An automated AP dashboards offer several benefits that older manual methods do not, such as:
- Real-time data at a glance
Information in real-time is the most up-to-date, contributing to increased budgetary control and responding to expenses and decisions now.
- Continuous visibility
Ongoing access to all KPIs, trends, and any other matters that must be managed to achieve AP goals.
- Deeper insights
A closer examination of the efficiency of information processing and identification of deficits improves work organization and resource use.
Core Metrics to Track on Your AP Dashboard
Cost per invoice
Total Amount Paid to all the AP Department Divided by the Number of Invoices that have been Processed = Average Total Cost per Invoice.
Several invoices measure the extent to which it is expensive to process a single invoice, and the average cost per invoice demonstrates how much it will cost, on average, to process an invoice.
Applying the result of this calculation to the organization’s further planning can also assist in identifying labor costs of hours spent and employees, accounts payable operational tool and software costs, paper check with envelope charges, and postage fees. AP leaders can keep This number low by either stripping out any unneeded spending or embracing the use of Virtual Cards.
Average processing time
Time taken to process Invoices / Total no of invoices = Average time spent on each invoice.
This measure informs the average time it takes to process each invoice in the business. Knowing how many days, on average, workers spend processing invoices will help identify inefficiency. If it takes a lot of time to process a single invoice, invoice processing becomes expensive because of amortized labor costs. This metric should be analyzed with the average price per invoice to establish areas that need improvement.
Percentage of electronic payments
This metric aims to determine the proportion of suppliers forwarding your company’s electronic invoices so that you can prepare to address them, whether with an AP automation solution or through ERP functionality. E-invoicing is a more inexpensive and faster method of billing and invoice processing, and the release of such incentives assists in minimizing overall costs.
Due date compliance
On your AP dashboard, pay attention to due dates so that timely payments can be checked. The payment schedule should be monitored to compare with the suppliers’ relationships. The most significant indexes are on-time payments, delays, and related penalties. Establish accurate information exchange with suppliers on how the payments would need to be made to avoid aggravated problems associated with payments.
Invoice exception rate
On your AP dashboard, pay a lot of attention to the invoice exception rate to identify and reduce the variations in invoicing. Keep records in the form of statistics whereby you record more disputed invoices, modern errors, and the time it takes to solve these issues. Optimized working on the invoices should be carried out to enhance the management of supplier relations with a keen emphasis on the financial aspect.
Advanced Features of an AP Dashboard
Automation tools
Intermediate clerical jobs can be automated in an AP dashboard, enhancing efficiency and accuracy.
Examples include:
Invoice processing automation collects invoices, validates them, and routes them to the approver, which will ensure there are no data entry errors and no time consumption.
Payment automation:
Automate the payment process and time to guarantee timely payments while possibly restructuring the cash flow.
Supplier onboarding automation:
Automate the flow of new suppliers’ documentation and information during the onboarding process.
Reporting automation:
Create drafts of custom reports and analytics that routinely give an overview of the AP team’s performance.
These features enrich the dashboard’s capabilities by decreasing the time spent and the number of mistakes possible and by supplying helpful information for decision-making.
Integration capabilities
The key is that AP integration capabilities in an AP dashboard connect the data flows and financial management. By linking AP systems with other organizational applications like ERP, accounting, and procurement, organizations create real-time visibility of financial processes, removing common manual reconciliations. This integration promotes efficiency, accuracy, and decision-making because it gives a total view of an organization’s financial activities.
Implementing and Optimizing Your AP Dashboard
Setting up your dashboard
Deploying an AP dashboard effectively involves key steps:
Define objectives:
Find out goals and Key Performance Indicators to include.
Choose relevant metrics:
KPIs align with the specific goals/aims.
Data integration:
Implement a connection between the AP systems and all the necessary data.
Dashboard design:
The design of the bed should be simple to facilitate the interpretation of the data.
Training:
Orientation on how to use the dashboard to the stakeholders properly.
Customization for enhanced visibility
The first step in adapting the general layout of the AP dashboard to the requirements of a particular organization is to define key performance indicators associated with objectives. It is also essential to arrange the work dashboard in a way that highlights the most critical data.
Customize the notification to major events and add other data feeds for relevant information. Ensure the dashboard configurations are current and relevant and have the best impact and orientation on the particular aim.
Training and user adoption
To ensure that the change of the new AP system is accepted and used by the staff effectively:
- Give training to help the users understand its use based on their roles.
- Provide practical training sessions, tutorials, and learning materials for practice.
- Listen to the feedback and complaints and try to solve them immediately.
It is essential to stress successes achieved with the help of a new system to underline such aspects as increased work speed and the quality of decisions made to improve the system’s popularity among users.
Conclusion
An accounts payable dashboard template offers real-time monitoring of the financial processes, allowing the management to make informed decisions and plan for the future. Systematic management of inefficient working environments can quickly rid any organization of inefficiencies, cutting costs while simultaneously harmonizing relations with suppliers.
Using technology to handle financial operations aims to increase efficiency, accuracy, and conformity to requirements. By adopting corresponding automation tools and integration features, the teams can concentrate on the high-added-value activities while achieving increased efficiency.
Regarding technology, the ability to adapt to changes introduces the usage of innovations as the key to sustaining an organization’s growth and profitability. Thus, organizations are incentivized to approach their financial management and processing with the aid of technology to open up new markets. Try our dashboards at Biz Infograph and you will love them!