As finance operations continue to evolve, businesses are placing increased focus on process efficiency, data accuracy, and cost optimization. Among the many finance functions, Purchase-to-Pay (PTP) stands out as a critical area where benchmarking can significantly drive improvements. At Right Path Global Services Pvt Ltd, we recognize that smart benchmarking isn’t just about numbers – it’s about using those numbers to make smarter, faster, and more informed decisions.
Why Benchmarking PTP Processes Matters
Benchmarking allows organizations to assess how their current performance compares with internal goals or industry standards. It helps uncover inefficiencies, improve process compliance, and provide the data foundation for automation, digital transformation, or process reengineering. More importantly, it builds a culture of continuous improvement – one where finance teams are encouraged to challenge the status quo and strive for measurable progress.
Key Metrics that Drive Actionable Insights
One of the most impactful benchmarks in PTP is the percentage of invoices paid on time. This metric reflects the organization’s ability to meet payment obligations promptly, supporting strong supplier relationships and avoiding late penalties. Similarly, PO coverage or PO penetration measures the extent to which invoices are linked to purchase orders. A high PO penetration indicates better control over spending and helps mitigate risks related to unauthorized purchases.
Another essential metric is cost per invoice, which reveals how efficiently the accounts payable function is operating. By dividing the total operating cost of the AP team by the number of invoices processed, organizations can identify cost-saving opportunities, often through automation or shared services.
The first pass yield – how many invoices are processed correctly on the first attempt without manual corrections – is a clear indicator of process quality. A high first pass yield often signals streamlined workflows, while a low yield can point to issues in data entry, validation, or supplier onboarding.
Tracking the percentage of incorrect invoice processing or payments helps identify recurring errors and highlights the need for system or training interventions. Likewise, understanding the invoice processing cycle time – how long it takes from invoice receipt to completion – helps in identifying bottlenecks that delay the process.
Deeper Dimensions of Benchmarking
Beyond operational metrics, there are supporting insights that often go unnoticed but are equally valuable. For example, the invoice receipt cycle time shows how long it takes suppliers to send invoices after delivering goods or services. This can influence how organizations plan for accruals and manage cash flow.
The value of early payment discounts captured is another important benchmark. By comparing the discounts earned against the maximum available opportunities, companies can evaluate how well they are managing supplier payments and leveraging financial incentives.
Additionally, metrics such as the number of supplier queries and internal queries around invoice processing provide a qualitative view of process friction. High query volumes often indicate communication gaps, process inefficiencies, or system usability issues that need attention.
Finally, productivity per AP team member, measured by the number of invoices processed within a given period, offers an overall view of individual and team efficiency. This can inform workforce planning and technology investment decisions.
A Smarter Way Forward
At Right Path Global Services Pvt Ltd, we guide businesses in transforming their PTP processes through targeted benchmarking. We help organizations not just collect metrics but also translate them into actionable improvement plans that align with business goals. Our approach combines deep process understanding with analytics, automation strategies, and change management – all essential for driving performance in today’s competitive environment.
Smart benchmarking isn’t about chasing metrics. It’s about using the right metrics to elevate performance, unlock efficiencies, and build a finance function that’s agile, accurate, and ready for the future.
Let us help you discover the untapped potential in your PTP process – and take the next step toward transformation.
