Cost Reduction in Accounts Payable: Key Performance Indicators in School District Operations


Key Performance Indicators (KPIs) are defined as "a quantifiable measure that is used to evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it engages." When applied effectively throughout an organization, KPI analysis provides valuable information about strengths and weaknesses in performance which can lead to cost savings and improved performance. 

"What are Key Performance Indicators in school district operations and business?"

Acknowledging that school districts needed more than tribal knowledge and spreadsheets to manage complex infrastructure and increased demands on their budget, The Council of Great City Schools and ActPoint KPI set out to define KPIs that could impact business and operations the most. After rigorous review, they created over 500 KPIs that school district leaders across the nation routinely use to measure, compare, and manage their business and operations performance, sometimes finding significant cost savings or new streamlined processes to employ. 

For example, the Accounts Payable (AP) department is one area where analyzing KPIs can help district leaders understand if cost savings can be realized. Due to the potential for a significant number of manual or paper processes that are traditionally in place within the AP department, there are often significant savings to be realized, but how do leaders know where to look for efficiencies and opportunities for cost savings? 

Measuring performance is crucial to understanding where to look. This is where having effective key performance indicators to measure school district operations can have a big impact. One KPI that district business leaders often use to measure effectiveness in the accounts payable department is "Invoices Processed per FTE per Month".

After you’ve identified areas for improvement, where can district leaders go to know what the best are doing differently?  Identifying peer districts and contacting the right operations leader can be a time-consuming challenge, but is simple for members of the ActPoint KPI Community. We’ve recently put in place tools which allow KPI Community members to visualize their performance against their peers, and then directly connect with the top performers to ask what they are doing to be a top performer. 

Here is a recent example of a conversation:

Question: “What automation practices do you have in place to achieve high numbers of invoices processed?”

Answer: “We processes 98% of our invoices through an Open Text Capture Center (OCC) by scanning invoices and extracting data from the document using Optical Character Recognition (OCR). The completed image is then uploaded to tables where the data is extracted to build vouchers… This process eliminates manual keying of invoices and reduces the paper handling significantly.”

In this example, an ActPoint KPI community member found an area of weakness, found a peer district which was the top performer at processing invoices was able to learn what they could be doing better. The ActPoint KPI community has members actively engaged in conversations about school district operations performance improvement. 

Phillip Smith

About The Author

Phillip leverages his extensive software and education industry experience to share innovative solutions for many of our valued TransAct customers and partners. As leader of AfterSchool21 and OutOfSchoolTime-Tracker sales, he helps support after-school program administrators in parent pay management and accurate 21APR reporting. Phillip also leads the ActPoint KPI team and the Council of Great City Schools (CGCS) partnership. ActPointKPI supports district and state business leaders nationwide in their efforts to manage costs and drive resources back to where they belong–the classroom.