Efficiency is Boosting Performance in Financial Operations, Recent Research Shows

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Are accounts payable departments seeing an increase in efficiency because they’ve invested in automation, or are they using more automation because they’ve trimmed their staff levels during the economic downturn and have avoided rehiring? It’s a chicken-and-egg question researchers are trying to answer in the most recent report on the PRGX Accounts Payable Productivity Index developed by International Accounts Payable Professionals (IAPP) and The Association for Work Process Improvement (TAWPI) in collaboration with the American Productivity and Quality Center (APQC).

AP functional leaders are always looking for benchmarks against which to measure performance and set productivity goals.

Are accounts payable departments seeing an increase in efficiency because they’ve invested in automation, or are they using more automation because they’ve trimmed their staff levels during the economic downturn and have avoided rehiring?

It’s a chicken-and-egg question researchers are trying to answer in the PRGX Accounts Payable Productivity Index (APPI), developed in 2010 by International Accounts Payable Professionals (IAPP) and The Association for Work Process Improvement (TAWPI) in collaboration with the American Productivity and Quality Center (APQC) and PRGX Global Inc., the world’s leading provider of recovery audit services and the pioneer in profit discovery services.

“AP functional leaders are always looking for benchmarks against which to measure performance and set productivity goals,” said PRGX president and CEO Romil Bahl. “The PRGX AP Productivity Index offers a broad and relevant set of global, cross-industry metrics that will prove insightful for companies of all sizes. We are excited by the uptake in the number of participants and look forward to continued collaboration on the index with IAPP and APQC.”

The index report for the first quarter of 2011, which includes data from 2009 and 2010, shows AP departments are seeing their performance on the upswing because of changes they’ve made to improve their efficiency. Among the findings based on the scores of AP top performers:

  •     Top performing accounts payable organizations were more likely to have an integrated ERP system with automated invoice data entry into the general ledger.
  •     Top AP performers in the U.S. were more likely to have adjusted their staffing levels when the economic activity slowed in 2008, maintaining the AP staffing level per $1 billion revenue constant, whereas other organizations tended to see an increase in staff levels.
  •     Best practices among top AP performers include high levels of automation, high volume levels, shorter cycle times and the use of shared services.

Across all APPI participants, the productivity measures indicate that larger organizations tend to have higher APPI scores, U.S.-based firms tend to score higher on the APPI than their European or Asian counterparts, and that the rebound in the underlying metrics relative to 2007 levels indicate that organizations have adjusted the AP function with the recession.

“The joint research project with PRGX continues to bring significant insight and usable information to the world of financial operations,” said Thomas M. Bohn, president and CEO of The Institute of Financial Operations, the umbrella association that includes IAPP and TAWPI.

To read more about the PRGX Accounts Payable Productivity Index, visit http://www.TheIAPP.org/resource and click on the AP Index icon.

About The Institute of Financial Operations
The Institute of Financial Operations is a membership association comprising four affiliates: International Accounts Payable Professionals (IAPP), International Accounts Receivable Professionals (IARP), the National Association of Purchasing & Payables (NAPP), and The Association for Work Process Improvement (TAWPI).

Based in Orlando, Fla., with offices in Boston, New York, and London, the Institute serves as a global voice, chief advocate, recognized authority, acknowledged leader, and principal educator for people in financial operations, with a particular focus on accounts payable, accounts receivable and payments, automation, data capture and document management, and procure-to-pay. Combined, the affiliates have more than 6,000 members.

Under the Institute, the affiliates share one board of directors, one staff, and a single portfolio of member benefits available to all, including Financial Operations Matters magazine and a new website scheduled to launch in late 2011. Each affiliate maintains its own brand, events, career resources, volunteer opportunities, online tools and other leading-edge resources, and educational offerings including e-learning and certification.

About PRGX Global, Inc.
Headquartered in Atlanta, Georgia, PRGX Global, Inc. is the world’s leading provider of recovery audit services. With more than 1,400 employees, the company operates and serves clients in more than 30 countries and provides its services to over 75% of the top 30 global retailers. PRGX is also pioneering “profit discovery,” a unique combination of audit, analytics and advisory capabilities that improves client financial performance. Beyond its core retail practice, PRGX is actively pursuing initiatives to expand into new markets, most notably healthcare. For additional information, please visit PRGX at http://www.prgx.com.

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Jean Creech Avent
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