Top 5 Metrics Every AP Leader Should Track in 2025 and Beyond
by The Ottimate Editorial Team
In the past, accounts payable (AP) was primarily focused on clerical tasks and issuing checks. But not anymore. Today, AP has evolved into a strategic force fueling cash flow, strengthening vendor relationships, and providing insights that drive better decisions.
The key to unlocking that value is keeping a close eye on the metrics that matter most. With the right visibility, AP shifts from being a cost center to becoming a true growth driver.
But with so many potential KPIs, which ones should AP leaders actually focus on? In this post, we’ll take a closer look at the five that matter most in 2025.
Metric #1: Invoice cycle time
When it comes to processing invoices, every minute matters. While small delays in approving invoices and issuing payments may not seem like a big deal. But they quickly add up – slowing month close, tying up cash flow, and eroding vendor trust.
Invoice cycle time, which is the total time from invoice receipt to payment, is one of the clearest signals of AP efficiency. Track it closely, and you’ll quickly see where delays are holding the business back.
When it comes to invoice cycle time, what does “good” look like? Teams with best-in-class AP processes can process invoices in five days or less. In contrast, manual processes can drag on for weeks or even longer.
Speeding up invoice cycle times creates a clear competitive advantage that goes beyond efficiency. Faster processes improve cash flow visibility, build vendor trust, and increase the likelihood of capturing early payment discounts.
If you notice your invoice cycle time is longer than you’d like, automation is the most effective way to bring it down. By streamlining invoice capture, coding, and routing, you eliminate bottlenecks – and your team won’t have to waste time chasing down approvals. You’ll have smoother workflows, faster cycle times, and an AP function that delivers true business value.
Metric #2: Cost per Invoice
Processing each invoice requires time, and time is money. Between manual data entry, chasing approvals, and correcting errors, the cost of handling just a single invoice can easily exceed $10-$15. Multiply that by hundreds or even thousands of invoices, and the impact on your bottom line is huge.
Cost per invoice shines a light on the true expense of your AP process. It reveals both the obvious and hidden costs of processing, including labor, time, and technology. The lower the number, the more efficient and scalable your AP operation becomes.
AP teams that embrace automation can cut costs to under $3 per invoice. Labor costs drop because teams aren’t stuck keying in data, chasing approvals, or fixing avoidable errors. On top of that, organizations see greater returns from their technology investments.
If your cost per invoice is higher than you’d like, start by reviewing your AP processes. Look for opportunities to streamline workflows and leverage automation. By doing so, you’ll reduce costs and free your teams to focus on more strategic work.
Metric #3: Discounts captured vs. missed
Early payment discounts are essentially free money. But all too often, businesses miss out. Invoices get stuck in manual processes, bottlenecks slow things down, and deadlines slip by. When that happens, the opportunity to save is gone.
Tracking the percentage of discounts captured versus missed is so important. It shows whether AP is helping the business maximize cash flow opportunities or leaving money on the table. Top performing AP teams capture 80% or more of available discounts. It’s a benchmark worth striving for if you want AP to shift from a cost center to a profit driver.
Improving this metric comes down to speed and foresight. Automation accelerates invoice approvals, while AI-powered alerts help teams stay ahead of upcoming discount deadlines. When payment schedules are aligned with your cash flow strategy, your team can capture savings without putting liquidity at risk.
Metric #4: Exception rate
No AP leader wants their team bogged down by a mountain of exceptions. But in many organizations, a large portion of invoices still require manual intervention due to missing data, mismatched purchase orders, or outright errors. Every exception slows down processing, adds extra work, and increases the risk of mistakes.
Tracking your exception rate – which is the percentage of invoices that require manual intervention – is key. It highlights where processes aren’t running smoothly and where bottlenecks are holding AP back from scaling.
Top performing AP teams keep their exception rates under 10%, allowing invoices to flow smoothly without adding headcount. If you’re not there yet, the good news is that exceptions can be dramatically reduced with the right tools. AI can handle three-way matching across POs, invoices, and receipts, while trust scoring helps flag low-risk invoices for automatic approval. With the right tools and processes in place, you’ll see faster processing, fewer errors, and stronger controls – all of which position AP as a reliable partner to the business.
Metric #5: Vendor satisfaction score
Make no mistake: vendors take note of how easy (or difficult) it is to work with your AP team. Accurate, on-time payments build confidence and strengthen relationships. On the flip side, late payments, errors, or inconsistent processes quickly erode trust.
Vendor satisfaction is the ultimate test of AP’s performance. It captures the cumulative impact of accuracy, timeliness, and transparency on the relationships your business depends on.
High vendor satisfaction translates directly into business value. Vendors who trust you are more likely to offer favorable terms, prioritize your orders, and partner with you for the long haul.
If your scores are lackluster, focus on consistency and communication. Proactively share payment updates, provide visibility through vendor portals, and leverage automation to ensure payments are accurate and on time. The payoff is stronger, more collaborative vendor relationships that directly benefit your business.
Looking Ahead: AP in 2025 and Beyond
The face of AP is changing fast, and it shows no signs of slowing down. In the coming year, AP will continue evolving from a back-office function to a strategic hub. The next wave of transformation will be driven by a few key trends, including:
- AI-powered analytics that surface insights AP leaders can take action on right away.
- Fraud prevention tools that make payments secure in an increasingly complex digital environment.
- Real-time payments that improve cash flow and strengthen vendor trust.
The common thread is data. By tracking and acting on the right metrics, finance leaders can move beyond simply keeping the books clean. They’ll be positioned to shape smarter cash flow strategies, strengthen vendor relationships, and contribute directly to business growth.
Track and boost the metrics that matter most with Ottimate
AP metrics aren’t just numbers on a dashboard. They’re levers that drive efficiency, cash flow, and vendor trust. When finance leaders consistently track the right KPIs and act on them, they gain visibility, reduce risk, and turn AP into a true strategic advantage.
If you’re unsure where to start, the five metrics we explored in this post are a great place to start. Master them and you’ll see faster processing, lower costs, and stronger relationships across the board.
With Ottimate, finance leaders have the tools they need to track, improve, and outperform on all the metrics that matter most. Ready to see how? Book a demo today.