Accounts payable (AP) reporting allows companies to track and report business expenses and help maintain accurate financial records. Analytics tools empower businesses to take this data to the next level, potentially achieving benefits like reduced costs and more efficient workflows.
AvidXchange’s 2024 Trends Survey identified data analytics as one of the top five priorities for finance leaders this year. According to the 500 finance executives we surveyed, 85% already have access to real-time data analytics in their department or have plans to implement these capabilities in 2024.
Our Trends Survey found that most commonly, finance departments utilize data analytics to inform decision-making (66%), help identify fraud (61%), and catch and reduce errors (59%).
Employees in the AP function can drill down further, analyzing data that specifically improves their efficiency and overall impact on the organization. AP teams can analyze three types of data to level up their work.
1. Invoice Data
With a business intelligence tool, AP staff can quickly and easily analyze their invoice data. Our 2024 Trends Survey found that 77% of AP teams with access to data analytics are using it this way.
Reports allow AP staff to view invoices by status, batch, amount, days past due, and more. They can measure the time between when an invoice was received and when the invoice was approved. Teams can also analyze approval metrics and trends to help identify bottlenecks and ensure invoices are paid on time.
Reports can show useful information like the total number of invoices in the workflow at a given time, average invoice amount, and the number of approved and unbatched invoices. AP staff can track invoices by entity or supplier as well as the status of invoices including the number of invoices aging by calendar days.
Analyzing invoice data can identify which invoices are due soon and which are past due to help AP teams prioritize their next actions.
2. Invoice and Payment Workflows
Analyzing where invoices are in the workflow is a helpful way for AP teams to find areas to create efficiencies. For example, reports can help identify invoices with a longer processing duration.
Measuring workflows shows invoices escalated, excessively re-assigned and unmanaged to ensure payments stay on track and get to suppliers on time.
Of the 500 finance executives who participated in our 2024 Trends Survey, 71% said their AP departments use data analytics to measure invoice and payment workflows.
3. Purchasing Patterns
Our 2024 Trends Survey found that 62% of AP teams use data analytics to track purchasing patterns. They often use payment reports to show a summary of things like:
Total number of payments Payment amount Average days to clear Accelerated payments
These reports can also display payments by entity, supplier, month, payment method, and status.
Analyzing payment data helps AP pros uncover purchasing patterns. They can see what’s being purchased, how often, by whom, and from which suppliers. With that knowledge, AP and procurement teams can work together to group purchases for volume discounts or consolidate similar purchases with a single, lower-cost supplier.
Additionally, organizations can leverage this information to inform negotiations with suppliers. By scrutinizing detailed invoice information, AP teams can see patterns, identify spending trends, and measure supplier performance. This information can also help when negotiating potential partnerships and discounts with suppliers the company works with frequently.
How is your accounts payable team using data analytics?
Source: 2024 Trends Survey, AvidXchange September 2023
How AP Automation Delivers Access to Analytics
Adopting AP automation reduces manual work and streamlines processes. Many AP automation solutions create easy-to-analyze dashboards and reports, giving finance teams near-immediate access to data analytics without switching between different tools.
Adopting AP automation software boosts efficiency, which translates into a more organized and consistent data pool, facilitating better analytics. Additionally, by digitizing invoices, AP automation software captures detailed transactional data in a structured format that can then be analyzed to identify spending patterns, track vendor performance, and optimize cash flow management. Moreover, automation enhances data accuracy, reducing the risk of discrepancies that can skew analytics outcomes.
With timely access to comprehensive and reliable data, AP departments can make informed decisions faster, identify cost-saving opportunities, and contribute to improving the organization’s overall financial performance.
In addition to these benefits, adopting AP automation software empowers AP departments in the following ways.
Improve Business Results with Intelligent Insights
AP automation tools with built-in artificial intelligence (AI) capabilities allow your AP staff to access analysis that can lead to better business decisions. Meaningful insights and data visualizations allow AP staff to find and share new ways of streamlining processes, cutting costs, and growing revenue.
By providing such data and insights, AP departments can elevate the importance and role of their team in the organization. They can proactively share insights with leadership that can drive improved business results. And AP pros can be seen as an important source of data as they can respond to requests more quickly and intelligently.
Access Custom and Flexible Reporting
With business intelligence tools that provide bespoke reporting capabilities, finance teams can select from a wide variety of data points to build customized views of data catered to their specific organizational needs. They can also perform ad-hoc analytics, rapidly sharing insights with the rest of their organization.
Reduce Development Resources and Costs
AP departments can reduce the added costs and complexity of using multiple disparate platforms by using an analytics platform that is embedded within their AP automation software. As a result, AP staff can gain full control of important metrics to confidently make business decisions by automating analytics monitoring, management, and deployment.
Attract and Retain AP Talent with More Strategic Opportunities
By investing in AP automation with analytics reporting, AP teams are freed from manual, time-consuming tasks and can focus more of their time on strategic work like analyzing data. An AP automation solution with analytics reporting not only provides efficiencies but may also lead to greater career satisfaction among AP staff.
Our 2023 AP Professional Career Satisfaction report conducted with The Institute of Finance & Management (IOFM) found that 76% of AP pros with fully automated systems “agree” or “strongly agree” they have access to the tools and tech they need to build effective reports, compared to only 17% of those with manual systems.
Our survey discovered that 78% of AP pros welcome the use of modern technology in financial operations because it will allow their team to work more efficiently. It also provides flexibility by enabling remote work. In the long term, 75% believe automation will have a positive impact on their career.
Overall, AP staff with access to AP automation and data analytics tools are freed from repetitive manual tasks, enabling work on more strategic projects. They can focus on conducting more insightful and actionable data analysis, helping to make a significant impact on the organization’s financial success.
Click the button below to download our free guide and learn more about the ways your AP team can use data analytics to its advantage, improving workflows, cutting costs, and driving overall efficiency.