Rate Your Payment Strategy

Do metrics really matter? Isn’t ignorance supposed to be bliss? When it comes to managing an organization’s payment strategy, nothing could be further from the best practice. There are many reasons why organizations should be tracking B2B payment metrics, but it boils down to cost.

Payment Metrics

Every organization wants to minimize its costs, but many lack the necessary metrics to support this goal. For example, to start determining the impact your B2B payments have on the bottom line, know the:

1. hard- and soft-dollar costs associated with your procure-to-pay (P2P) processes

2. number of payments by payment method (per month, quarter and year)

Create a plan, including a policy, to shift your organization away from costly check payments and toward electronic payments.

Building or Refining a Metrics Plan

Following are some exploratory questions to help you make the most of metrics.

• What metrics are most relevant, based on current goals? Metrics allow organizations to derive key performance indicators (KPIs) for evaluation purposes. Avoid going overboard and obtaining a bunch of numbers that are not used or necessary.

• Where is the data available? How easy or difficult is it to obtain?

• How does your organization utilize the information and how often? Sadly, metrics data often ends up getting filed away and forgotten. A better question is, how can your organization utilize metrics?

• Who are the parties responsible for providing the data, analyzing it and sharing the results? 

• Who should receive the results and in what format? For the C-Suite, a consolidated dashboard visually depicting KPIs is ideal.

• What are the acceptable minimum thresholds for each metric or KPI? When would remedial action or further research be needed? Pay particular attention to any metric anomalies compared to a previous period.