Percentage of Payments with Purchase Orders

Metric Details & Benchmarking Report Download

KPI Benchmarks : Percentage of Payments with Purchase Orders

  • Benchmark Range 10%-85%
  • Benchmark Average 54.0%
  • Benchmark Sample Size (n) 36

* Is High or Low Best: Higher is Better


Download a Sample Percentage of Payments with Purchase Orders

KPI Details : Percentage of Payments with Purchase Orders

This KPI measures the controls in place to minimize the instances of unauthorized invoice payments made to company vendors, or suppliers. If a vendor payment has an approved purchase order (PO), it helps to ensure that the purchase has gone through the necessary steps within the organization required to approve and process payment. A large number of invoices without POs can delay payment, lead to vendor disputes and increase instances of non-compliance with purchasing standards.

KPI Best Practices : Percentage of Payments with Purchase Orders

  • Purchase orders (POs) required for any invoice over a certain threshold
  • Procurement actively enforces use of vendor POs
  • Provide vendors with incentives for PO use to speed up payment and improve compliance

KPI Calculation Instructions Percentage of Payments with Purchase Orders?

Two values are used to calculate this KPI: (1) the number of vendor invoices that are accompanied by a purchase order that has been approved by the appropriate party, and (2) the total number of invoices that paid. Purchase orders (POs) are legally binding agreements between a buyer and a supplier, or vendor, for the buyer to purchase a certain amount of goods or services from the supplier. Approved purchase orders usually contain a purchase order number, a shipping date, billing address, shipping address, the requested items, quantities, and price. Many times, purchase orders are required for purchases that exceed a certain threshold.

KPI Formula :

(Number of Vendor Invoices Paid with an Approved Purchase Order / Total Number of Vendor Invoices Paid) * 100

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