December 2008

Benchmarks: Invoices Processed per FTE

This survey looks at invoice processing, specifically the key metric number of invoices processed
per full time equivalent employee (FTE). Invoice throughput is analyzed according to variables
including invoice format, level of automation, size of organziation and industry/area of endeavor.
The participants in the study numbered 600 and represent organizations across the entire
spectrum including manufacturing, retail, professional services, education, healthcare, finance,
media, utilities and government.
Report Contents
Study Participants
Organization Size (number of employees)
Revenue (quartile)
Industry (NAICS)
Level of Automation
Summary Study Observations
Survey Results
Invoices Processed Per FTE
Number of Invoices Processed Annually
Average Number of Line Items per Invoice
PO Invoices
Formats of Electronic Invoices Received
Paper Invoices Received
Methods of Paper Invoice Data Capture - All Organizations
Number of Accounts Payable FTEs Correlated to Organization Size
Study Participants
The Accounts Payable Network surveyed 600 organizations of all sizes and industries. Following is
the sample profile by organization size, annual revenue, and industry by NAICS code.
Organization Size by Number of Employees
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Annual Revenue Profile of Participants
1st quartile = $40 million
Median = $350 million
3rd quartile = $2 billion
Industries Represented (NAICS classification)
Industry (NAICS) Percent of
Participants
Accommodation & Food Service 2%
Admin & Support, Waste Mgnt 3%
Agriculture, Forestry, Fishing, Hunting 1%
Art, Entertainment, Recreation 1%
Construction 3%
Educational Services 4%
Finance & Insurance 12%
Health Care 13%
Information/Media/Publishing 6%
Management of Companies & Enterprises < 1%
Manufacturing 26%
Mining 3%
Professional, Scientific, and Technical Services 5%
Public Administration (Government) 5%
Real Estate/Rental/Leasing 1%
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Retail Trade 5%
Transportation 2%
Utilities 5%
Wholesale Trade 1%
Level of Automation
Organizations indicated whether their level of automation is low, medium or high, or if they have
implemented no automation. The study confirms a correlation between level of automation and
increased number of invoices processed per FTE.
Summary Study Observations
The median number of invoices processed per FTE per month for all organizations is 833;
the third quartile (75
th
percentile) mark is 1500 invoices per month per FTE.
Productivity varies across industries; retail leads in number of invoices processed per FTE,
followed by health care, utilities and manufacturing.
Productivity also varies within specific industries; in construction, third quartile performance
is nearly double the first quartile and matches the third quartile of health care; in mining,
the third quartile is 3.5 times the first quartile.
The strongest correlation is inverse between number of invoices processed and percent of
invoices on paper. Paper is at the root of lower productivity.
There is an exponential increase in number of invoices processed through reduction in the
percentage of paper invoices.
Nearly one in five organizations receive 100 percent paper invoices.
45 percent of organizations receive more than 80 percent of their invoices on paper.
One percent of organizations indicate that they receive no paper invoices.
Given the percentage of invoices issued on paper, there is significant potential for greater
productivity.
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The average number of line items per invoice is highest in retail. Health care and utilities
have the next highest average line items per invoice.
The median percentage of invoices against a purchase order (PO invoice) is 56.
Among industries, wholesalers have the highest percentages of PO invoices.
Correlating AP FTEs to organization size, at the smaller end of the size scale, there is
approximately one AP FTE for every 250 employees; this shifts to one AP FTE for 300 to 600
employees in mid-size organizations, and one AP FTE per 600 to 1600 employees among
large organizations.
Survey Results
Invoices Processed Per FTE
Number of Invoices Processed per FTE per Month
A key metric is number of invoices processed per FTE. This study looks at number of invoices
processed per month per FTE, breaking out the numbers by organization industry, size, level of
automation, and by percent of paper invoices processed. The study results provide benchmarks for
number of invoices processed per FTE per month. Presented here are the median, and first and
third quartile data points for invoices processed per FTE. (Managerial staff was excluded from the
FTE count.)
The first table provides a look at the three quartile points for the entire study sample.
All Number of Invoices per FTE per Month
1st Quartile 434
Median 833
3rd Quartile 1,500
By Organization Size
The next look at the data is by size of organization, where the data show generally that the larger
the organization, the greater the throughput per FTE, which finds some correlation to level of
automation. While there are some large companies with low or no automation, and small
companies with high automation, the data show that the larger the organization, the likelier it is to
have higher levels of automation.
Organization Size 1st Quartile Median 3rd Quartile
1 - 250 192 371 833
251 - 500 417 694 1,083
501 - 1,000 417 781 1,042
1,001 - 5,000 646 1,083 1,861
5,001 - 10,000 475 943 1,667
10,001 - 20,000 708 1,250 2,260
20,001 - 35,000 750 1,667 2,615
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> 35000 792 1,517 2,986
By Level of Automation
As expected, automation increases invoices processed per FTE. (Elsewhere in this report, find data
tables on invoice format, e.g. paper, EDI, e-invoice via network, and other electronic invoice
transmission. Also find data on paper invoice manual entry and imaging without and with optical
character recognition.)
By level of automation 1st Quartile Median 3rd Quartile
none 266 625 1,042
low 417 792 1,250
medium 600 1,000 1,667
high 438 1,021 2,188
By Industry
The high-volume Retail industry leads in invoices processed per FTE, and correlates to high levels
of automation. The industries in the following table are sorted on the median number of invoices
processed per FTE per month. In some cases, third quartile data show higher throughputs for some
industries whose median does not rank as high, reflecting a broad spread of data due the
variations in levels of automation.
By Industry 1st Quartile Median 3rd Quartile
Retail Trade 556 1,389 2,889
Wholesale Trade 991 1,292 2,076
Health Care 608 1,063 1,667
Utilities 767 1,019 1,772
Manufacturing 625 1,000 1,822
Transportation 417 977 1,042
Accommodation & Food Service 573 949 1,035
Construction 695 890 1,667
Admin & Support, Waste Mgnt 177 833 1,444
Public Admin 545 833 1,273
Mining 379 825 1,355
Educational Services 295 694 961
Finance & Insurance 340 647 1,238
Professional, Sci, Tech Services 250 568 760
Info/Media/Publish 250 417 589
Other Services (except Public Administration) 155 250 613
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By percent of paper invoices
The following table and graph show number of invoices processed per FTE per month according to
the percent of paper invoices processed. Those processing 100 percent paper invoices have the
lowest invoice throughput, though the third quartile figures are not unimpressive. As the
percentage of paper invoices decreases and electronic invoices increase, the number of invoices
processed per FTE increases. There is still a lot of paper 18 percent of organizations are
processing 100 percent paper; the invoices of 46 percent are between 80 and 99 percent paper.
Less than four percent of organizations report that paper invoices comprise ten percent or less of
the invoices processed.
The real gains in number of invoices processed per FTE come when paper invoices are reduced to
comprise 40 percent or less of all invoices processed. While the mean of those in the 40 to 80
percent paper category show a 13.5 percent increase in throughput, the median for those below 40
percent paper is a 42 percent increase over processing 100 percent paper invoices.
Organizations automtated to the extent of processing 80 to 90 percent electronic invoices have a
mean increase of 55 percent; and those that receive 90 or more percent of their invoices
electronically have a median number of invoices processed per FTE of 145 percent more than those
receiving 100 percent paper invoices. So the increase in invoices processed per FTE increases
exponentially with the percentage of invoices received electronically.
Invoices 1st Quartile Median 3rd Quartile
100 percent paper 417 808 1,250
81 - 99 percent 427 833 1,371
41 - 80 percent 500 917 1,523
21 - 40 percent 551 1,147 2,405
11 - 20 percent 536 1,250 3,000
0 - 10 percent 775 1,979 2,920
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Background Metrics
Number of Invoices Processed - Annual
The following table presents quartile results for number of invoices processed annually for the
entire sample, followed by a table presenting quartile results by organization size.
Quartile Annual Invoice
Throughput
First quartile 15,000
Median 54,000
Third quartile 180,000
Organization Size First Quartile Median Third Quartile
1 - 249 3,450 8,050 15,125
250 - 499 9,000 14,400 30,000
500 - 999 14,000 24,000 36,000
1,000 - 4,999 39,000 70,000 150,000
5,000 - 9,999 71,647 127,500 226,000
10,000 + 136,500 469,000 1,018,000
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Average Number of Line Items per Invoice
The first table below presents results for the entir sample, followed by a break out of average
number of lines per invoices by organization size and then by industry, where greater distinctions
are seen. Retail industry invoices have the highest number of line items per invoice, followed by
health care.
Quartile Average Number of Line Items
First quartile 2.4
Median 4.0
Third quartile 6.0
Average Line Items per Invoice by Company Size
Organization
Size
(# employees)
First
Quartile
Median Third
Quartile
1 - 249 3.0 4.0 6.0
250 - 499 2.0 3.5 7.0
500 - 999 3.0 5.0 8.0
1,000 - 4,999 2.4 4.0 5.0
5,000 - 9,999 2.0 3.0 6.0
10,000 + 2.4 3.0 5.0
Average Line Items per Invoice by Industry
Industries First
Quartile
Median Third
Quartile
Construction 4 5 5
Education 2 3 5.5
Finance &
Insurance
2 3 5
Health Care 3 5 7.75
Information/Media
/Publishing
2 3 5
Manufacturing 2.48 4 6
Professional
Services
3 4 5
Public
Admininstration
(Government)
2 3 5
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Retail 3 4.5 10
Utilities 3 4 7.5
PO Invoices
Use of a purchase order shifts work to the front end of the procure-to-pay process and facilitates
faster invoice processing. Taken in aggregate, the median percentage of incoming invoices for
which there is a PO is above half. Variations are seen among industries. Wholesale trade is the
biggest user of POs, followed by manufacturing and mining.
All Organizations Percent of PO-Invoices
1Q 25%
Median 56%
3Q 80%
Industry First Quartile Median Third Quartile
Accommodation & Food Service 5% 38% 84%
Admin & Support, Waste Mgnt 26% 55% 71%
Construction 33% 65% 89%
Educational Services 30% 60% 82%
Finance & Insurance 1% 15% 44%
Health Care 40% 51% 70%
Info/Media/Publish 14% 40% 65%
Manufacturing 50% 75% 80%
Mining 43% 68% 90%
Other Services (except Public Administration) 5% 20% 40%
Professional, Sci, Tech Services 10% 40% 65%
Public Admin 28% 60% 88%
Retail Trade 20% 50% 75%
Transportation 25% 40% 70%
Utilities 40% 61% 75%
Wholesale Trade 83% 90% 94%
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