In this series, I am focusing on KPIs specific to Vendor Maintenance in Accounts Payable (AP). After all, what gets measured improves, and while most AP KPIs focus on Invoice Processing, I have identified 25 KPIs to track and measure the Vendor Setup & Maintenance Process and data in the Vendor Master File.
In last week’s blog post “25 KPIs for Accounts Payable Vendor Maintenance: Part 1 – Understand Your Vendor Master File” I identified 11 of the 25 KPIs that can be relevant for the Vendor Master File in AP Vendor Maintenance. I continue this week with 14 additional KPIs that focus on Vendor Request Activity which can be key to adequately staffing of team members, processing requests efficiently and reducing the potential for fraudulent activity.
Understand Your Vendor Request Activity – 14 KPIs
With the recent increase of phishing scams the way vendor requests are processed is changing. Whether transitioning to a vendor self-registration portal, introducing RPA or other digital solutions, or realigning team member workload to accommodate additional tasks required to prevent fraud, understanding how requests are being received and processed is critical.
As with KPIs for the Vendor Master File, you may be able to pull reports directly from your Accounting System/ERP, ticketing system (help desk) or use RPA to pull and consolidate data accordingly, while others may need to be manually tracked if that measurement is critical for your process, company or industry.
#/% of Vendors – Added: How many vendors are added per month can be used to identify seasonal trends, etc. for staffing levels and compared to the #/% of those Inactivated to note the net growth for use in a business case for a new or upgraded Accounting System/ERP. When combined with the #/% of Vendor Changed it can determine the level of effort for digital solutions or the costs for 3rd party validation services related to processing these requests.
#/% of Vendors – Changed: How many existing vendor changes are received per month can indicate problem areas. Are more change requests submitted months after new staff are onboarded or new Accounting System/ERP features are added? When combined with the #/% of Vendor Added it can determine the level of effort for digital solutions or the costs for 3rd party validation services related to processing these requests.
#/% of Vendors – Inactivated: How many vendors were inactivated this month? 0? Was the process run? Was it double the trend? Were these vendors that were the result of an acquisition that never submitted a W-9/W-8 and were never used? That can be a business case to change the process for future acquisitions where vendors are not onboarded until they submit the forms or are used. At the very least – these are the number of vendors that are no longer available for fraudulent activity.
#/% of Vendors – Pending Confirmation: Most AP Vendor Maintenance teams have added calling the vendor prior to changing a vendor’s banking (or more). Track confirmation attempts (most likely separately on a spreadsheet) and review the total pending. Adjust the process or policy periodically to ensure that pending confirmation requests are being followed up the by team members or have a date to close if no response from the vendor.
#/% of Vendors – Pending Updates: Received a request to make a change to an existing vendor, but reached out for more information or a missing form? Track attempts (most likely in a spreadsheet) or put a process in place to close the request if no response is received from the vendor or internal employee.
#/% of Vendors – Requests Completed Within SLA: How many requests are completed within your stated SLA? Identifying this measurement is critical to align staff as necessary to keep within SLA. We all know that being out of SLA, especially with ticketing/email requests, leads to even more tickets/emails about the status of the request.
#/% of Vendors – Submitted Email Requests: Do you have a ticketing system and can track the # of email requests? Use it to identify trends, time of requests and staff accordingly. Use decreases to support previous solution put into place or increases as support for a new tool, solution or team member.
#/% of Vendors – Called Helpdesk: Use this KPI as support for that vendor inquiry portal or vendor self-registration portal. These portals can reduce calls from vendors just checking on the status of their payments or the status of their payments once a correction is done to their remittance information on their vendor record.
#/% of Vendors – Requests Processed by AP Team Member: This measurement can be used as part of the overall performance of a team member. I say this with caution because while it is possible to quantify the number of vendors adds, existing vendor changes, tickets/emails processed, there are always exceptions. A mom and pop organization with one location is faster to setup than a multistate company with multiple remit and ordering addresses. In that same scenario, setting up a vendor in SAP vs PeopleSoft will take longer due to the number of vendors that need to be setup and partnered. Trends in performance should be compared with assignments, etc.
#/% of Vendors – Exceptions/Urgent Process: This should be tracked (manually most likely) to identify patterns. Are the requests coming from the same department(s)? Meet with the group to train or identify process changes to eliminate the need for immediate processing. Does your team allow the same exceptions over and over again? Consider changing the policy.
#/% of Vendors – Denials or Request More Information: Is this trend increasing? If being submitted by Internals, identify the group and work with them to request the correct information. If you are dealing directly with the vendors, consider standardized language or a document to send that identifies a clear process and required forms.
#/% of Vendors – Returned ACHs: Track this to identify the problem area. Was it a miss key by a team member? Did the team miss a “Notice of Change” multiple times but did not reach out to the vendor or update the vendor record (many are routing number updates from bank mergers, etc). Are vendors not being inactivated and old data is used for current invoice and payment activity? Since this most likely will have to be done manually, you can also track on the same spreadsheet through to the completed payment to ensure that your vendors are paid.
#/% of Vendors – Returned Checks: The same as Returned ACHs, track this to identify the problem area. Are vendor remit address changes not being done or not being submitted? Are vendors not being inactivated and old data is used for current invoice and payment activity? If you are tracking manually, document through to the replacement check to ensure the vendor is paid.
KPI for Return on Investment (ROI)
14. Length of Time x Average $ Per Hour: Track how long it takes to process any request (add/change/returns,etc) by the AP Vendor Maintenance team, Internal Team members, etc and include in the ROI calculation for that vendor self-registration portal you’ve had your eye on! Want more info on ROI for a Vendor Portal – click here to read my blog post.
These are my 14 recommended KPIs for AP Vendor Maintenance for “Vendor Request Activity”. Does your department track or measure any other KPIs? I’d love to hear about it – comment below or email me at firstname.lastname@example.org.
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Debra R. Richardson,
MBA, APM, APPM, CPRS
Debra is an accounts payable speaker, consultant, and trainer with over 20 years of experience in AP, AR, general ledger, and financial reporting for Fortune 500 companies including Verizon, General Motors and Aramark.
For the past eight years, Debra has focused on Global Vendor Maintenance, and implemented a vendor self-registration portal for 140k+ global vendors across five Accounting Systems/ERPs. In her consultancy, she focuses on internal controls and authentication to prevent fraud in the vendor master file.