Coupa Blog

Coupa is a company of talkers, passionate about sharing tips, tricks and advice for improving finance and procurement and saving companies of all sizes time and money. But we’re not the only people with opinions and ideas. We’d love to hear from you so join the conversation!

Digitally transforming your business spend with eProcurement: how do you measure up?

If CEO predictions are any indicator of what’s to come, buckle up, because we may be in for a bumpy ride. According to PwC’s annual CEO Survey, there’s been a 436% increase in the number of CEOs saying they expect global economic growth to decline this year. Just 35% said they are “very confident” about revenue prospects for the next year.

 

So what’s a business leader to do? The most popular answer seems to be “look inside-out for profitability and growth.” Faced with economic uncertainty, finance and procurement executives are increasingly challenged to not only uncover and deliver savings opportunities, but also to reduce risk, support innovation agendas, and become levers for growth.

 

3 Digitization KPIs to Measure Your Procurement and Expense Process Maturity

 

It’s important to set measurable goals to assess the maturity of your procurement and expenses processes. By analyzing real business operating data from the nearly $1 trillion flowing through the Coupa platform, Coupa BSM experts have identified several Key Performance Indicators to help you benchmark your progress. Focusing on improving these KPIs can help you improve profitability, streamline operations, and achieve efficient growth.

 

Here are three of the most influential KPIs for Purchasing, Invoicing, and Expenses and how companies with digitally mature processes are performing in these areas:

 

Purchasing KPI:
Percentage of Electronic PO Processing

89.7%

What is is:
The percentage of POs processed digitally measures success of eProcurement initiatives designed to reduce PO processing time and employee and supplier frustration.

Why it matters:
A high rate of digital POs often means that procurement teams have time to focus on strategic initiatives, like lowering risk and optimizing productivity, instead of chasing lost orders.

Invoicing KPI:
Invoice Approval Cycle Time

30.7 hours

What is is:
The average time, in hours, from the time of invoice submission to the time of final approval measures the efficiency of the entire approvals process.

Why it matters:
A short invoice approval cycle time assures that there are no unnecessary project delays due to payment delays. It also enables early payment discounts and fewer status inquiries while decreasing the risk of late payment penalties.

Expenses KPI:
Percentage of Manual Expense Audit

6%

What it is:
The percentage of expense reports that go through human audit reflects the precision and accuracy of existing controls and compliance throughout the expenses management processes.

Why it matters:
A low percentage of manual auditing implies that expense policies and automated audits are effectively ensuring compliance. Large numbers of manual audits place a costly administrative burden for AP teams.

 

Read Coupa’s 2019 Benchmark Report to learn more about how focusing on these and other critical KPIs can help improve your teams’ process efficiency and productivity.