The 4 KPIs Your Accounts Payable Team Should Be Tracking Immediately

Most AP teams track invoice volume, cycle time, and cost per invoice. Yet those metrics alone don’t explain what leadership cares about: payment reliability, supplier experience, and risk. The KPIs that matter most are those that show how those outcomes are created or undermined across the payables process. They reflect tradeoffs between speed and accuracy, efficiency and control, and individual productivity and system health.

This guide draws on APQC research and real-world AP benchmarks to outline the accounts payable KPIs that matter most, how they relate to one another, and how to use them to improve performance without creating new exposure elsewhere in the process.

Why AP needs a balanced KPI framework

High-performing organizations don’t optimize AP for a single outcome. They treat AP as a control layer for company spend, where cost, speed, accuracy, and workload are linked through the same day-to-day constraints. That’s why KPI tracking has to be balanced.

Operators need metrics that show whether invoices are moving cleanly through intake, coding, approvals, exception handling, and payment. The point is not just to move faster, but to move predictably, catch problems early, and keep controls intact as volume and complexity change.

When one KPI becomes the target, spend control erodes in familiar ways:

• Cutting cost increases shortcuts, rework, and exception volume
• Pushing cycle time down shifts work into escalations and post-pay cleanup
• Driving productivity raises queue pressure, approval fatigue, and rubber-stamping

A balanced KPI framework makes those tradeoffs visible in time to act. It protects throughput without sacrificing accuracy or control, and it helps AP focus effort where it actually changes outcomes.

Benchmark snapshot by industry 

Cycle times vary widely across industries because invoice mix, approval paths, compliance requirements, and supplier models differ. Use these ranges pulled from this Procurement Benchmark report to sanity-check your baseline and to spot where your process might be adding friction. The levers are consistent across industries: clear approval rules, fewer handoffs, and fewer exceptions.

Definitions: “PO time” refers to the time from requisition/PO initiation to an approved PO. “AP time” refers to the time from invoice receipt to payment (or invoice close, depending on your AP process).

How to use this

Don’t copy another industry’s number. Use it to pressure-test your own baseline. If you’re far outside the range, dig into the drivers (handoffs, exception rate, approval latency, missing PO matching, supplier quality). Then improve your baseline while protecting accuracy and controls.

 Accounts Payable KPI Categories

APQC groups AP metrics into four core categories. Together, they tell the full story of AP performance.

1. Cost KPIs

Cost KPIs measure how much it takes to run your AP operation, typically normalized by invoice volume or revenue. Lower is generally better, but only when quality and speed remain intact.

2. Productivity KPIs

Productivity KPIs measure output per input how much work gets done with the resources you have. Higher is generally better, assuming accuracy and controls are maintained.

3. Efficiency KPIs

Efficiency KPIs look at how well resources are allocated relative to organizational scale. These metrics highlight structural issues that aren’t always visible in day-to-day work. Done right, companies will see anywhere from a 30-50% increase in efficiency.

4. Cycle time KPIs

Cycle time KPIs measure how long AP work takes from start to finish. Faster is better, but only when invoice workflows are correct and approvals are appropriate.

4 AP KPIs to track

1. Total cost to perform the AP process per invoice (Cost)

This KPI captures the true cost of processing a single invoice, including labor, systems, and overhead—regardless of where the work happens. APQC benchmark (cost per invoice): Top performers average $2.05, the median is $5.78, and bottom performers average $10.00. The point isn’t to chase the lowest number—it’s to find what’s driving your cost (manual touches, exceptions, approvals, coding, rework) and remove the avoidable work.

“Once you capture all the costs that happen for AP or another finance process, you may notice redundancies and opportunities to streamline—and that your process is much less cost-effective than you think.” — APQC

Why it matters:

• Reveals hidden inefficiencies
• Highlights manual work that automation could eliminate
• Creates a baseline for improvement

This metric usually drops when you reduce manual touches (data entry, chasing approvals, rework) and prevent exceptions from becoming the default.

2. Number of invoices processed per AP full-time equivalent (Productivity)

This KPI measures how many invoices each AP employee processes over a given period. Top-performing AP teams process significantly more invoices per FTE than bottom performers, largely due to better workflows and automation, not longer hours.

APQC benchmark (invoices per AP FTE, annually): Top performers process about 24,284 invoices per FTE, the median is 9,483, and bottom performers are around 5,000. If you’re far from the median, it’s usually not “effort”—it’s handoffs, unclear ownership, and exception-heavy approval workflows.

Why it matters:

• Identifies bottlenecks and rework
• Highlights approval delays and exception handling
• Shows the impact of manual vs. automated workflows

Understanding how invoices relate to purchase orders is critical here (and a common source of rework when it’s unclear).

3. Number of AP FTEs per $1B in revenue (Efficiency)

This KPI looks at AP staffing levels relative to company size. Data shows an almost 80% gap between top and bottom performers—meaning many teams are structurally over-resourced for the results they deliver.

(AP FTEs per $1B in revenue): Top performers run AP with about 3.3 FTEs, the median is 6.8, and bottom performers average 14.4. This KPI is especially useful when leadership asks, “Why does AP feel overloaded?”—it helps you separate a true capacity issue from a process/design issue.

Why it matters:

• Reveals scaling issues
• Helps justify process changes
• Highlights the need for standardization

Efficiency improves when teams standardize intake, coding, approvals, and exception handling, and when procurement and AP aren’t working off two different versions of the truth.

4. Invoice cycle time: receipt to payment (Cycle time)

This KPI measures the number of days from invoice receipt until payment is sent.

Shorter cycle times reduce late fees, improve vendor relationships, and increase predictability.

Top performers move from weeks to days. Where the median is 15 days, and the bottom performers average 23 days. If your number is creeping up, the root cause is usually approvals (waiting), exceptions (rework), or missing PO/receipt data (more chasing). For instance, Canal Barge reduced their requisition cycle time from about 29 days to 1 day.

“Organizations should supplement core KPIs with measures like quality, error rates, and stakeholder satisfaction.” — APQC

Why it matters:

• Exposes approval delays
• Highlights exceptions and rework
• Connects AP performance to vendor trust

Separating invoice approvals from purchase approvals is often the biggest lever for improvement—because it stops AP from re-litigating decisions that should have happened before the spend was committed.

How to successfully track KPIs

1) Set the measurement rules once

Define the few terms that make KPI data reliable:

• Invoice received (email/portal vs entered in system)
• Invoice processed (approved vs matched vs posted vs paid)
• In scope (PO + non-PO, credits, disputes)

2) Capture timestamps at the points that create waiting

Track dates/times for:

• Received → entered/validated
• Entered → coded
• Coded → sent for approval
• Sent → approved
• Approved → matched
• Matched → scheduled/paid

These timestamps turn cycle time into specific, fixable delays.

3) Connect each core KPI to the operational drivers you can manage

Use a simple KPI→driver map:

• Cost per invoice → touches per invoice + rework rate
• Invoices per FTE → exception rate + approval lag
• FTE per revenue → standardization level + % of invoices requiring manual handling
• Cycle time → approval lag + first-pass match rate + dispute time

4) Operationalize technology so it directly moves those drivers

Consider invoice approval software to help you connect to the driver, it improves:

Intake + capture

• Use invoice OCR/e-invoicing capture to reduce data-entry steps and standardize fields.
• Auto-flag duplicates at intake for orders to reduce rework and risk.

Validation + matching

• Use 2-way/3-way match automation to lift first-pass match rate and reduce exception handling.
• Auto-route exceptions by type (price mismatch vs missing receipt vs missing PO) to cut dispute time.

Approvals + routing

• Use rule-based invoice approval workflows (thresholds, vendor/category rules) to shorten approval lag.
• Escalations and reminders based on SLA timers to keep invoices moving predictably.

Coding + controls

• Use coding rules/templates for frequent vendors/categories to reduce touches and rework.
• Enforce required fields before an invoice can enter the approval queue.

Reporting + monitoring

• Use real-time budget tracking to drill down into insights.
• See spend by vendor, invoice type (PO vs non-PO), and exception reason, so KPI movement points to a cause.

5) Run a weekly KPI→action cadence

Each week:

• Review the four KPIs + drivers (exception rate, approval lag, match rate).
• Identify the stage with the biggest delay (approvals, matching, intake, disputes).
• Make one focused process/tech adjustment tied to that stage.
• Re-check the driver the following week to confirm the change worked.

6) Use benchmarks to calibrate priorities and sequence

Benchmarks help you decide where to focus first:

• If cost per invoice is high, prioritize reducing touches (invoice OCR, coding rules, intake standardization).
• If invoices per FTE is low, prioritize exception reduction and approval lag (match automation, routing rules).
• If cycle time is high, prioritize approvals and exception resolution (workflow SLAs, exception routing).
• If FTE per revenue is high, prioritize standardization and automation coverage (PO compliance, consistent intake).

Tracking KPIs is step one. Improving them is step two.

If you’re trying to reduce cost per invoice, shorten cycle time, and cut exceptions, here’s a breakdown of top accounts payable automation tools and what they’re best for.

This article has been updated from our original interview with Rachele Collins, SPHR, SHRM-CP, Ph.D – Principal Research Lead, Financial Management, APQC. We’re very lucky to have Rachele as a guest and contributor on Spend Culture.