How to Set SMART Accounts Payable Goals

Accounts payable is essential to any business’s success. An efficient AP department ensures invoices are paid on time, relationships are maintained, and cash flow remains steady. Breakdowns in these processes, on the other hand, can result in a barrage of unpleasant issues.

Do you know how your accounts payable department is performing? To get a clear picture, it’s important to set intelligent accounts payable goals, track progress, and make necessary adjustments. If you rely on manual processes to complete these steps, AP goals can feel overwhelming. Fortunately, there’s a smart solution: AP automation.

Read on to learn how to set realistic accounts payable goals and how to track their progress, and the benefits of AI-driven AP automation. Or use the links below to jump ahead to a section of your choice.

• What is the Main Objective of the Accounts Payable Department?
• What are Some Examples of Accounts Payable Goals
• How to Set SMART Goals in Accounts Payable
• Best Practices for Achieving Accounts Payable Goals
• Accounts Payable Goals: FAQs
• Set & Achieve Accounts Payable Goals With Tungsten Automation

What is the Main Objective of the Accounts Payable Department?

The accounts payable department manages all outgoing payments. Payments to suppliers, vendors, contractors, and more are handled by accounts payable. In addition to simply sending out these payments, accounts payable handles bookkeeping, forecasting, reporting, and more.

On a larger scale, many vendor, supplier, and contractor relationships come down to the efficacy of your accounts payable team. By ensuring all parties get paid accurately and on time, accounts payable can maintain strong relationships with key partners to your business. The benefits of AI-driven AP Automation should not be dismissed and can significantly bolster relationships by eliminating tedious tasks, historically handled by your AP teams. AI-driven AP processes can be extremely cost effective allowing your AP employees to focus on more strategic tasks and in turn exceeding vendor, supplier and contractor relationships. Let’s take a look.

What are Some Examples of Accounts Payable Goals?

No matter how strong your accounts payable team is, there’s always room for improvement. To identify weak spots and track improvements, it always helps to set goals. Let’s review common accounts payable goals examples to guide goal setting for your AP team.

Improve Productivity and Efficiency

This most basic accounts payable goal example is the easiest and most obvious to recall when assessing how to measure improvements in your business. Every AP team has some inefficiencies and productivity bottlenecks that could benefit from identification and elimination.

Some of the key ways that you can seek to improve productivity include:

• Reducing invoice cycle times
• Making invoice payments more efficient, e.g., capturing discounts but protecting cash flow
• Increasing the number of invoices processed per employee
• Evaluating which tasks could be supported by agentic AI

All these goals are achievable with automation systems that are available today, which can aid your teams in the extraction, classification and handling of invoice data.

A recent report by Ardent Partners, AP Metrics That Matter in 2025, illustrates automation levels within AP departments.

Minimize Processing Costs

Minimizing processing costs is a nearly universal accounts payable goal. High costs per invoice can be a significant financial sinkhole for businesses due to poorly structured AP procedures. Not only do you need to pay each invoice, but when the cost per invoice is high, your business is losing potentially tens of thousands of dollars annually. High payroll costs and time consuming error correction processes drive up the financial impact of every invoice. AP directors should strongly consider setting a low target price benchmark, then improving the department to drive costs toward that goal.

Maximize Payment Accuracy and Control

Incorrect, insufficient and late payments all cause headaches for a company. Worse still is when the wrong vendor receives payment for an invoice that isn't associated with their order. Inaccuracies in payment processes cost money, and problems with approvals can slow down the process at the very moment when it should be accelerating.

Evaluate the accuracy of your teams and set goals to improve precision, implement better approval control and keep a firm grip on every cent possible. When trying to pursue your accounts payable goals, sample the data that your teams produce to check for problems.

Minimize Fraud

While on the topic of approvals: How much has your business lost to payments fraud, either from vendors or from unscrupulous employees? Some vendors might try to overcharge your business, altering line items after the initial order. This accounts payable goal can be easily achieved through automation. Matching the original purchase order and the receiving report to the invoice automatically can simplify the identification of these anomalies and trigger a manual follow-up process.

Automated electronic approvals can help you avoid the risk of embezzlement by ensuring that invoice processors aren't also invoice approvers. Reducing the risk of fraud is a critical goal, especially when you consider that nearly 5% of a business’s revenue might vanish to fraud each year.

Save Time

One critical productivity goal is to reduce full cycle AP time. Take this opportunity to calculate how long the average invoice takes sitting in your business systems before it finally gets paid. Is it days—or even weeks? Do small-value invoices take too long to process?

Have you considered AI agents to complement the various steps in the AP process and eliminate time-consuming components that are not reliant on humans?

Set a goal for your accounts payable team to save more time. Saving time means saving money, boosting accuracy, and keeping efficiency at the highest level possible without inducing staff burnout. Save time at every step, and other goals will become easier to reach in the process.

Support Employees

One of your key accounts payable goals should be to provide the support that your AP teams need to succeed each day. That means more than providing them with the appropriate tools—it includes supporting them with in-depth training and problem-solving assistance. When conflict arises with other departments over a payment procedure, your job should be to stand up for the team's work and ensure that the department receives proper recognition for the value that it creates.

Achieving these goals is difficult, if not impossible, with many traditional AP tools and workflows. Manual data entry and invoice handling shared among dozens of desks is not conducive to agile work. When you can no longer find a way to bypass these bottlenecks, AI-driven automation solutions such as Tungsten InvoiceAgility are the ideal alternative.

With automated invoice data capture, processing and exception handling, InvoiceAgility simplifies many of the most critical AP processes while providing a top-down view of the entire procedure. Experience new visibility for steps that were previously invisible to everyone except an individual AP clerk, and access measurable metrics instantly.

Find out how implementing this cutting-edge, AI-powered software can really move the needle in your business and ensure you stay ahead.

How to Set SMART Goals in Accounts Payable

These goals and objectives are foundational to success, but they are too broad to use as the structure for a cohesive improvement program. Instead, you'll need to identify more specific measures with SMART goals. Every time that you set new objectives for your accounts payable teams, those goals should be:

• Specific and well-defined, such as reducing the time necessary for an invoice to be processed or reducing the number of invoices flagged as exceptions.
• Measurable, with metrics that you can track and monitor, so that it is possible to see when and where improvements occur.
• Achievable, with a realistic destination associated with each goal. You can't go from 0% to 100% in one leap, so use a stair-step method of goal setting instead.
• Relevant. Set goals by considering what is most relevant to the department's mission, rather than refining workflows or processes that aren't a part of your core work.
• Time-bound. Setting a goal alone isn't enough—you need to be able to measure progress over specific time intervals and adjust.

Let's consider a few specific examples of accounts payable goals that follow the SMART framework:

Payment Metrics

Collect and examine metrics based on how many payments your department completes each day or week and how quickly they occur. One of the most critical metrics to consider is the "exception rate": the number of invoices that generate exceptions that then require manual handling. These exceptions can create frustrating backlogs for your business and drive-up costs per invoice.

Examining these metrics will make it easier to determine where the problem lies. It may be an issue with your own procedures (such as mismatched POs) or with vendors, such as certain vendors sending invoices littered with errors. Watching these metrics gives you a quick way to check how your department performs at the essential stages of the process.

AP Processing Times & Invoice Backlogs

How many invoices are waiting to be processed at any given time in your business? Once an invoice enters your system, how long does it take to reach approval and payment? Automation tools can give you deep insights into these metrics and allow you to set SMART goals for improving them. As with payment metrics, you will be able to see more clearly where backlogs occur in the process. It could be during data extraction, approval processing, or another step—but you will have a clear path to solving the problem.

Précision accrue

What is an acceptable error rate in AP processes? The answer is "zero"—but that rate is not realistically achievable in real-world applications, even with advanced automation. However, you can drive your error rate as close to zero as possible while striving to create the most effective audit trails. There are many SMART goals that you can set surrounding accuracy, from invoice data capture to correct approval routing.

Training AP Employees

Providing proper training on new AI automation tools and procedures for every accounts payable clerk should be among your goals and objectives for overhauling the department. Set goals for periodically refreshing your staff on best practices and procedures, especially as you deploy new technology. Comprehensive training and a gradual learning curve are key to achieving the buy-in that makes automation succeed. Trying to rush the transition can lead to costly automation failures and a team that refuses to use new workflows.

Best Practices for Achieving Accounts Payable Goals

As you evaluate AI-driven automation tools to improve your team's workflows and consider the data that these systems produce, remember that goal setting is not a one-time task. As you achieve milestones, you should reconsider your assumptions and set new goals to strive for over time. While there may be a ceiling to how effective your processes can be, it is a long road to reach that point.

How do you set goals that are realistic and achievable? There are three things that you can do to give these efforts the best chance of success.

Review and Audit Your Department

To improve your department, you must first know where failures occur. Trying to shift your existing workflows into a digital environment without any changes is a recipe for wasted time and effort. Instead, get a broad view of the issues that your teams face and where there is room for improvement. Every workflow should undergo an intensive audit. Examine each step and ask whether you can improve, automate or eliminate it altogether in favor of a more efficient process.

Categorize Your Goals Intelligently

As you set goals, ask yourself what it will take to achieve them. Group goals by type (e.g., accuracy or efficiency) so that it is easier to track your progress toward these milestones. Automation is not a silver bullet that solves problems just by existing. Structure your goals carefully so that it is easy to see each step toward major improvements.

Be SMART

Remember the SMART acronym and apply it to every effort that you make toward process improvements. SMART goals keep you grounded in what is realistically doable within the business. When you can demonstrate measurable improvements within definable time frames, it's easier to showcase the value of investing in AI tools for automation.

Accounts Payable Goals: FAQs

What are the main obstacles in meeting AP goals?

A significant challenge that stands in the way of accounts payable teams meeting their goals is poor goal-setting practices. Many teams with good intentions set goals that are vague, undefined, or too difficult to track. A goal that can’t be accurately tracked can never be met, even with the best intentions.

With SMART AP goals, you can set measurable milestones, track progress, evaluate and improve workflows.

What is the best KPI for accounts payable?

The exact KPIs for tracking progress in achieving your accounts payable goals will vary based on your goal and how you want to measure success. For instance, if your accounts payable goal is to improve productivity and efficiency, you may use invoice cycling time or invoices processed per employee per day as your KPI.

That said, there is a universal KPI that can be used as a good indicator of your team’s performance. This metric is known as the exception rate. It’s a measurement of the number of invoices that generate exceptions and must be handled manually. Accounts payable teams with a high exception rate tend to have low productivity, whereas those with a low exception rate tend to be highly efficient.

What is a SMART goal for accounts payable?

In order to set achievable goals for accounts payable, it helps to use the SMART goals framework. A SMART goal is one that is:

• Specific: Rather than setting a vague goal to “do better,” your goal should be specific, for example reducing payment processing time or lowering your exception rate.
• Measurable: Your accounts payable goal must also be trackable using a KPI. In the above examples, your KPI would be payment processing time or exception rate.
• Achievable: To set a SMART goal, it must also be achievable. You can’t cut your payment processing time in half in one go. Instead, consider setting a goal of reducing payment processing time by 10%. Once that goal is achieved, aim to reduce it another 10%.
• Relevant: For an accounts payable goal to be useful, it must also be relevant to the biggest issues your team faces. Don’t bother working on minutia. Instead, tackle a challenge team members face every day.
• Time-bound: The final step is to put a timeframe on your goal. A goal with no end date tends to drag on forever. Set a reasonable time expectation, then stick to it!

Set & Achieve Accounts Payable Goals With Tungsten Automation

With the many objectives of accounts payable management teams, staying on track is easier said than done. Even setting goals can become a challenge. When you have the modern software tools and support that you need to audit, analyze and improve the AP process, however, all your department's team members can contribute to the organization's success.

By first understanding what it means to build a successful accounts payable process and then acquiring the tools to make and measure improvements, you can demonstrate clear value to upper management. Optimizing cash flow, realizing discounts and building strong vendor relationships will all make your team more than just a cog in the machine. Intelligent goal setting empowered by automation creates opportunities for AP to become and remain a key stakeholder.

Discover advanced automation solutions from Tungsten Automation and learn how to transform your business's approach to AP today.