2022

BENCHMARKING
REPORTS

The Benefits of
Benchmarking

Royce Grayson Morse, IOFM Managing Editor

 THE BENEFITS OF BENCHMARKING

TABLE OF CONTENTS

Introduction........................................................................................................................................3

Survey Demographics........................................................................................................................4

The Impact of COVID.........................................................................................................................7

What’s Next.......................................................................................................................................10

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 THE BENEFITS OF BENCHMARKING

TABLE OF FIGURES

FIGURE 1. Respondents’ Industries.................................................................................................4

FIGURE 2. Accounts Payable FTE Equivalents................................................................................5

FIGURE 3. Staff Approaching Retirement Age.................................................................................5

FIGURE 4. AP Structure.....................................................................................................................6

FIGURE 5. Annual Volume, All Invoices............................................................................................6

FIGURE 6. PO-Based Invoices..........................................................................................................7

FIGURE 7. Remote and Hybrid Work Arrangements........................................................................7

FIGURE 8. Staff Retention Strategies...............................................................................................8

FIGURE 9. Travel Policies..................................................................................................................9

FIGURE 10. Strategy for Predicted Global Recession...................................................................10

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 THE BENEFITS OF BENCHMARKING

INTRODUCTION

Each year, IOFM polls the accounts payable community to gather information about their current
challenges, their progress in resolving them and their plans going forward.

Assessing how your organization compares to others like it and then looking for the opportunities to
improve allows you to streamline your operations and maximize the contributions of AP. Considering
the current labor shortages seen in almost every business sector and the challenges of hiring, training
and retaining talent, it only makes sense to apply your valuable resources to the areas with the greatest
potential for improvement.

However, the goal of benchmarking is not to lay out an exact path for what your AP organization should
be doing differently. Rather, it shines a light on which improvements can provide you with the greatest
benefits. Each organization is different, so gathering information is just the first step in your journey.
Once you know how you stack up against other businesses, you can determine what your priorities are
and how to best address them within the structure you have and with the resources you have available.

This is the first in a series of three 2022 IOFM benchmarking reports, meant to paint a broad picture of
the survey participants. Collectively, the three reports reveal AP trends and represent a starting point for
your process improvement journey.

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 THE BENEFITS OF BENCHMARKING

SURVEY DEMOGRAPHICS

FIGURE 1. RESPONDENTS’ INDUSTRIES

Respondents by Industry
1.3%

2.6%

9.3%

2.2%

9.3%

10.9%

14.1%

5.8%

6.1%

3.8%

4.8%

9.3%

1.0%

2.9%

1.6%

15.1%

Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 312

The largest industry categories of survey respondents were manufacturing, healthcare and education.
Industries that fall into the “Other” category include entertainment, environmental, real estate, consulting
and more.

Accounts payable department size measured in full-time equivalents revealed that nearly half of
respondents work in an AP organization of five or fewer people. Over a fifth work in departments with
more than 20 full-time staff, and the remaining 30 percent fall somewhere in between.

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FIGURE 2. ACCOUNTS PAYABLE FTE EQUIVALENTS

Number of Full-Time AP Employees

47.3%

21.7%
18.8%

12.1%

0–5 6 – 10 11 – 20 More than 20

Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 313

FIGURE 3. STAFF APPROACHING RETIREMENT AGE

Percentage of AP Staff Approaching Retirement

Within the Next Five Years
70.5%

13.8%
8.7% 7.1%

More than 50% Between 25% and 50% Less than 25% Don’t know
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 312

An ongoing concern expressed by IOFM members is the number of staff planning retirement in the near
future. AP has felt the brunt of this, with a workforce that tends to be mature and looking for an off-ramp
in the aftermath of COVID.

This is particularly problematic at the current time, when the labor market is tight and it has become
increasingly difficult to hire new staff. New hires also require training, which is time-consuming, and
established AP staff are already trying to do more with less.

Our data shows that while seven out of 10 respondents expect that less than a fourth of their staff will
retire within the next five years, over one in five anticipate that they will lose anywhere from a fourth to
over half of their teams in that timeframe.

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 THE BENEFITS OF BENCHMARKING

Something that fundamentally affects the operating style of accounts payable is how the department is
structured. For most respondents, that means working in a centralized, AP-specific department located
in a single facility.

However, about three in 10 survey participants reported they work in a shared services center, which
may combine AP functions with other finance tasks like accounts receivable, procurement or collections;
or even with non-finance service functions such as IT and human resources.

Decentralized and partially centralized operations represent the organizational structure for more than
a fourth of respondents. Here, operations are managed from a variety of different locations, sometimes
with central oversight, and sometimes operating completely independently from one another. This is not
uncommon when a business has offices in numerous countries, each with different suppliers, invoicing
regulations and currencies.

FIGURE 4. AP STRUCTURE

Structure of AP Departments
41.7%

29.5%

15.7%
13.1%

Decentralized Partially centralized Centralized, Shared services

not part of a shared center
services center
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 313

FIGURE 5. ANNUAL VOLUME, ALL INVOICES

Annual Invoice Volume

40.5%

28.9%

21.9%

8.7%

Fewer than 50,000 50,000 – 99,999 100,000 – 1 million More than 1 million
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 311

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 THE BENEFITS OF BENCHMARKING

More than four in 10 respondents report their invoice volumes to be less than 50,000 a year. Half fall into
a range of between 50,000 and one million invoices a year, and about one in 12 process more than a
million invoices each year.

FIGURE 6. PO-BASED INVOICES

Percentage of PO-Based Invoices

26.5%
25.6%
25.2%

22.7%

0 – 25% 26 – 50% 51 – 75% More than 75%

Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 309

Some organizations rely heavily on purchase orders for procurement purposes. Survey respondents were
fairly evenly divided into quadrants when reporting how many of their invoices are PO-based.

The Impact of COVID

FIGURE 7. REMOTE AND HYBRID WORK ARRANGEMENTS

Policy on Remote and Hybrid Work Arrangements

48.6%

39.9%

8.4%
3.2%

Both fully remote and hybrid Hybrid work policy (split between In-office only No physical office; fully remote
work allowed remote and in-office)
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 311

The world of work has changed in the last couple of years, largely due to the pandemic.

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 THE BENEFITS OF BENCHMARKING

We asked respondents about their organizations’ current policies governing either fully remote work or
the ability to work from home at least part of the time.

It’s worth noting here that some staff prefer working in an office environment, where they are better
able to stay focused with fewer interruptions. Some people also enjoy the face-to-face interaction and
collaboration they experience in an office setting. However, some staffers would rather work from home.
This not only costs them less in gasoline, automobile wear-and-tear and the time spent commuting — a
100 percent WFH strategy also allows those with family responsibilities to attend to them while being
able to work to a somewhat more flexible schedule.

In our survey, four out of 10 respondents stated their organizations allow AP employees the choice
to either work 100 percent remote or split their time between in-office and WFH. Nearly half of
organizations have a policy that requires some office time combined with days of remote work.

Fewer than one in 10 respondents reported that they must work in-office 100 percent of the time. That
represents a significant shift in the way business is done, one that may well continue for the foreseeable
future.

To address the ongoing labor shortage, we asked survey participants what employee retention strategies
their organizations now have in place to ensure they aren’t caught short-handed. This has become a
significant concern for many companies during and after the COVID-19 pandemic. Workers realize they
are in high demand and weigh incentives to change jobs against reasons to stay where they are.

FIGURE 8. STAFF RETENTION STRATEGIES

Employee Retention Strategies

77.8%

32.7%
29.7%
26.1%

14.4%
11.8% 10.5%

Hybrid or work-from- Greater training Higher pay Improved healthcare More time off Stay bonuses Other
home options and advancement and mental health
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 306
opportunities benefits

Because many organizations already had to put systems in place to allow remote work, offering this as a
retention strategy is relatively cost-neutral, which many other options are not.

In fact, over three-fourths of respondents indicate that WFH is being offered as a retention incentive.
IOFM also has anecdotal evidence that this is enabling organizations to hire people from many
geographically distant locations throughout the U.S. and beyond.

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Greater opportunities to learn new skills and the possibility of moving up in the organization — perks
that have often been unavailable to AP staff in the past — are now being extended by a third of survey
respondents to get team members to stay on. This is a fairly low-cost solution and one that tends to be
highly valued by staff.

Higher pay and improved benefits are being offered by about three out of 10 respondents’ organizations.
Because these things have a cost associated with them, as do higher compensation and stay bonuses,
they are not as commonly available to staff.

FIGURE 9. TRAVEL POLICIES

Current Travel Policy vs. Pre-COVID

54.2%

26.0%

7.8% 9.4%
2.6%

We do not require We have not resumed Travel approved on a Limited travel Same travel policy
travel travel at this time case-by-case basis and travel budget as pre-COVID
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 308

One area many accounts payable professionals are responsible for is making travel and entertainment
reimbursement payments to staff. We asked respondents about their organizations’ current travel
policies vs. what they were prior to COVID.

Over half reported that they have returned to the same policies as before COVID. A fourth stated that
travel is limited as are the funds allocated to it, and one in ten organizations require that travel be
approved on a case-by-case basis.

Finally, we asked survey participants their organizations’ approach to the widely predicted global
recession. (In fact, some experts state that we’re already in a recession as of summer 2022.)

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FIGURE 10. STRATEGY FOR PREDICTED GLOBAL RECESSION

Approach to Predicted Global Recession

33.2% 34.2%

17.6%
15.0%

Highly concerned and taking Concerned, considering Somewhat concerned, Not concerned, probably
steps to mitigate a strategy taking a wait-and-see approach won’t affect my business
Source: IOFM 2022 Accounts Payable Benchmarking Survey, n = 307

Although the majority of respondents reported their organizations are at least somewhat concerned, only
15 percent were highly so and are currently planning a strategy to mitigate the anticipated economic
downturn.

A third of organizations were on alert and considering their next steps; another third were concerned
but holding off taking action for now. About one in six organizations felt that the predicted recession
wouldn’t affect their operations.

What’s Next
In the next two 2022 IOFM benchmarking reports, we’ll explore processes and performance respectively.

To help you get the best insight into your peers’ operations, we’ll refine those results by the demographic
information from this report where appropriate. This will enable you to analyze your organization by
comparing it to others most like yours and make decisions about what steps you can take to get the
greatest improvement.

Remember: It’s about prioritization. While some day-to-day issues you encounter may be frustrating,
it’s important to look at the bigger picture to get the best perspective on where you stand to gain the
most benefit. Allocating resources to an irritating but relatively small problem may not be your best
choice. Instead, addressing the bigger issues that can help you improve efficiency or contribute to the
organization’s bottom line are a good place to begin.

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About the Institute of Finance & Management

Accounting and finance professions have each undergone nothing short of a complete
transformation since the Institute of Finance and Management (IOFM) was founded in 1982
and since then our mission has been, and continues to be, to align the resources, events,
certifications, and networking opportunities we offer with what companies need from the
accounting and finance functions to deliver market leadership. IOFM empowers accounting and
finance professionals to maximize the strategic value they offer their employers.

Our enduring commitment to serving the accounting and finance professions is unmatched.
IOFM has certified over 25,000 accounting and finance professionals and serves several
thousand conference and webinar attendees each year.

IOFM is proud to be recognized as the leading organization in providing training, education

and certification programs specifically for professionals in accounts payable, procure-to-pay,
accounts receivable and order-to-cash, as well as key tax and compliance resources for global
and shared services professionals, controllers, and their finance and administration (F&A) teams.

Learn more at IOFM.com

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