Accounts payable (AP) reporting allows companies to track and report business expenses and maintain accurate financial records. An analytics tool can also help companies find ways to cut costs by identifying spending patterns and gaining awareness of the average time and cost to process and pay each invoice.
In a recent AvidXchange survey, 70% of respondents said their finance department is tasked with producing more detailed reporting and analysis in 2023, while 61% indicated their finance team always or very often relies on reports and analysis to inform business decisions.
About a third (37%) of organizations say they can identify a leader specializing in data/reporting within their organization, according to the 2022 Wisdom of Crowds Business Intelligence Market Study. These leaders often rely on dedicated analytics tools to provide actionable insights, enabling finance teams to make confident, data-driven decisions.
So, what types of reports should your finance team analyze? Let’s take a closer look.
3 ways AP departments can use data to make better decisions
1. Analyze invoice data
With a business intelligence tool, AP staff can quickly and easily analyze their invoice data. Reports allow AP staff to view invoices by status, batch, amount, days past due and more. They can see the time between when an invoice was received to when the invoice was approved. Teams can also analyze approval metrics and trends to help ensure invoices are getting paid on time.
Reports can show the total number of invoices, 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 and the number of invoices aging by calendar days. Analyzing this data can identify which invoices are due soon and which are past due to help AP teams prioritize their next actions.
2. Measure invoice and payment workflows
Analyzing where invoices are in the workflow is important as it helps financial departments find areas to create efficiencies. These reports can help identify invoices with a longer processing duration. Measuring workflows also shows invoices escalated, excessively re-assigned, and unmanaged to ensure payments stay on track and get to suppliers on time.
3. Track purchasing patterns
Payment reports can show a summary of the total number of payments, payment amount, average days to clear and accelerated payments. These reports can also show payment by entity, supplier, month, payment method or 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, procurement teams could consider grouping purchases together to get a volume discount or consolidating similar purchases with a single, lower-cost supplier.
How AP automation provides better reporting and more strategic work
Adopting AP automation reduces manual work, streamlines processes and creates efficiencies. Finance teams can quickly access data without switching to another product, and they are freed to work on more strategic activities.
In fact, AvidXchange research found companies are prioritizing digital transformation tools that provide advanced data and analytics. More than half of the respondents indicated their department can now focus on “analyzing data to make more informed decisions” since adopting automation technology.
Improve business results by enabling AP staff to act based on intelligent insights
Built-in artificial intelligence capabilities allow your AP staff to have access to data 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/or 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 custom and flexible reporting capabilities, finance teams can select from a wide variety of data points to build their own custom views of the data catered to their specific organizational needs. They can also perform ad-hoc analytics on the fly in addition to saving and sharing the information with the rest of their organization.
Reduce development resources and associated costs of using multiple platforms
AP staff can gain full control of important metrics to confidently make business decisions by automating analytics monitoring, management and deployment. AP departments can also reduce the added costs and complexity of multiple solutions by using an analytics platform that is embedded within their existing AP automation software.
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 all in one place not only provides efficiencies but also leads to greater career satisfaction.
Our 2022 AP Professional Career Satisfaction report conducted in partnership with The Institute of Finance & Management (IOFM) found most of the things AP professionals cite as being “extremely important” when considering a job opportunity with another organization speak to the need for AP automation: options for remote or hybrid working, access to automated tools and technology and time to focus on strategic work.