As we continue our benchmarking journey through the Purchase-to-Pay (P2P) cycle, we now turn our attention to a metric that often reveals the real health of invoice processing behind the scenes – First Pass Yield. In our previous blogs, we explored Paid on Time, PO Coverage, and Cost Per Invoice, each reflecting a different aspect of operational performance. But First Pass Yield is unique in its simplicity: it measures how often things go right the first time.
When an invoice enters your system, is it processed straight through to payment without anyone needing to stop, correct, or intervene? If yes, it counts toward the first pass yield. If not – due to errors, exceptions, or manual reviews – it highlights inefficiencies that cost both time and money.
What Is First Pass Yield?
First Pass Yield represents the percentage of invoices that are processed successfully on the first attempt – no errors, no rework, no human touch. This metric tells us how clean, compliant, and automated your invoice processing really is. It’s a reflection of both supplier discipline and internal process robustness. High first pass yield means your processes are efficient, your data is accurate, and your teams aren’t overwhelmed with avoidable rework.
Why Some Invoices Don’t Make It Through
There are several reasons why an invoice might not clear on the first attempt. A common one is supplier non-compliance. When vendors send incomplete or inaccurate invoices – or worse, send the wrong type of document altogether – the accounts payable team must step in to fix the issue. This alone introduces delays and manual workload.
Limited automation is another hurdle. If your system lacks Optical Character Recognition (OCR) or if the OCR tool is poorly trained, the data capture process becomes error-prone. Manual validation steps creep in, reducing your first pass yield significantly.
Fragmented coding and unclear invoice routing processes are also culprits. Without proper supplier mapping or a structured approval matrix, invoices need to be manually routed to the right person for approval or coding. Every touchpoint is a chance for delay or error.
Exceptions like PO mismatches, missing GRNs (Goods Receipt Notes), or duplicate submissions are additional factors that disrupt the smooth flow of invoice processing. In many cases, these issues push the invoice into a queue for clarification or correction, lengthening the cycle and increasing operational costs.
Improving First Pass Yield – One Step at a Time
Improving this metric isn’t about achieving perfection overnight. It’s about identifying weak points in your P2P process and making focused improvements. Transitioning to e-invoicing helps ensure consistency and reduces manual data entry errors. A well-trained OCR system significantly improves the accuracy of captured data.
Monitoring supplier behaviour and enforcing invoice submission guidelines can go a long way in improving compliance. Establishing proper supplier mapping for coding ensures that invoices are routed correctly the first time. Encouraging stakeholders to promptly create GRNs or SES (Service Entry Sheets) ensures that invoices don’t get stuck waiting for confirmation.
At Right Path Global Services Pvt Ltd, we advocate building a self-review checklist as part of the invoice processing workflow. This proactive step minimizes basic mistakes before the invoice moves forward. Finally, automating the approval process through an inbuilt matrix eliminates the delays and errors that often occur during manual routing.
First Pass Yield Reflects Operational Maturity
While many P2P metrics focus on cost or timeliness, first pass yield gives us a glimpse into the quality and stability of the process. It’s not just about moving faster – it’s about moving smarter. A high first pass yield means your AP team spends less time fixing and more time adding value.
At Right Path Global Services Pvt Ltd, we help organizations transform their invoice workflows to improve straight-through processing and reduce the friction in financial operations. By targeting the root causes of low first pass yield, businesses can increase efficiency, reduce costs, and elevate the entire P2P experience for both internal teams and external suppliers.
In our next blog, we’ll turn our attention to exception rate management – a related but distinct metric that captures how often the process goes off-track and why. Stay with us as we continue decoding the metrics that matter.
