Accounts payable goals are set with good intentions and are unusually easy to get wrong, because payables sits between other people's behaviour and a deadline. A target that depends on approvers responding will be missed by a team that cannot control approvers, which teaches everyone that targets are decoration. A target that can be hit by paying later will be hit that way. This page is about setting goals that change behaviour in the direction you intended: which targets work for a small team, why they work, and the two that reliably backfire and what they backfire into.
Goals that work: they measure what the team controls
Invoices captured on the day they arrive. The unapproved list published before the cut-off. Reconciliation completed within two days of period end. Each is entirely within payables' control and each improves the close.
Goals that backfire: DPO targets and cost per invoice in isolation
A DPO target is hit by paying suppliers later, which is a treasury decision being made by a metric. Cost per invoice alone is hit by cutting checks. Both produce the number and not the outcome, which is the classic failure of a measure becoming a target.
Tie goals to the close, because that is the real deadline
The useful question is not whether payables is efficient in the abstract but whether it stops the month closing. On the worked example on this site a close is 33 hours and 2.75 working days across two people, and the unapproved pile at cut-off is what pushes it out.
Questions people ask about accounts payable goals
Should individuals have payables targets?
Only for things they control. A target that depends on approvers responding punishes the wrong person and teaches the team that measures are unfair.
How often should goals be reviewed?
When the process changes. A goal that survives a process change unexamined is usually measuring the old process.
What if a goal is always hit?
It has stopped being informative. Either raise it or retire it, rather than reporting a green light every month.