The key cost benchmark here is the cost per
invoice. The main challenge lies in defining a
comparable core activity to benchmark and
making allowances for the very different range of
payments involved. The definition adopted by this
club is that the core creditors’ activity starts when
invoices are input to the computer. This excludes
most of the work undertaken in local departments,
but must include the cost of local data input,
which can be an important element in the total
cost, and may be hard to estimate.
The other difficulty is the wide range of different
transactions that can be counted as ‘invoices’.
For example processing a benefit payment as
specified by the benefits system involves much
less work than paying a commercial invoice. The
type of workload can therefore heavily affect cost
per invoice comparisons.
There is no simple solution to this problem;
however participants can benefit from the wide
membership of these clubs by selecting for
comparison other members who have a similar
type of workload. Other comparisons include the
methods of payment, the number of incorrect
payments, and the percent paid on time.
November 2009 |